Progress in the Irish distilling industry has been of a cyclical nature with periods of expansion followed by contraction. Much depended on competitiveness in export markets, the prevailing spirit duty, consumer taste, and the ability of the Irish distillers to make the appropriate response to changes in these variables.

The late 1860s and 1870s saw considerable expansion in the industry after a period of more or less continuous decline from the 1840s caused principally by the temperance campaign of Fr. Mathew and frequent and heavy increases in the spirit duty which rose from 2s. 8d. per proof gallon in 1840 to 10s. 0d. in 1862. Thereafter, the spirit duty remained steady for almost fifty years until it was raised from 11s. to 14s. 9d. in 1909. But as Louis Cullen has remarked "It was only by the development of export markets that industrial firms could reach a scale of production which would make their costs competitive and hence enable them to survive on the home market against foreign competition." Exports of whiskey doubled between the 1860's and 1870's, doubled again by the 1890s and yet again by the first decade of the twentieth century or from a million gallons in the 1860s to 8.5 million gallons in 1907 - two thirds of Irish output. Despite the increased output on noticeable change took place in the number of firms participating in the industry which, no doubt, means that the participants improved their plants and achieved increased efficiency.

Number of distilleries in Ireland and quantity distilled, 1830 to 1900

The bulk of Irish whiskey exports went to England and probably came from the Belfast and Dublin distilleries and the Malcolm Brown distillery at Dundalk. According to Cullen the doubling of exports in the last decade of the century was associated with the expansion of the market for blended whiskey with its centre at Belfast. In 1907 5.4m gallons out of a total of 8.5m. gallons were exported from Belfast.

Turning to the midlands it is beyond doubt that substantial improvements were taking place at Tullamore distillery and at Locke's of Kilbeggan in the 1870s. According to Alfred Barnard's survey of the Irish distilleries in 1866 annual output at Tullamore distillery was 270,000 gallons, at the Wallace distillery, Birr 200,000 gallons and at Kilbeggan 157,200. There are substantial grounds for believing that these figures are exaggerated by as much as thirty per cent.

However, the trend is there if not absolute certainty and it would indicate that the three midland distilleries produced less than four per cent of total Irish output. Unfortunately, the Banagher distillery was not in operation in 1886 when Barnard made his systematic survey but other evidence would suggest that Banagher could match the combined output of the other three midland distilleries.

The Banagher Distillery Company was established in 1873 with a nominal share capital of £100,000 and head office in London. Three of its directors were London-based including Alderman Sir Sills John Gibbons, a former lord mayor of London, and the remaining two directors, F.A. Waller of Prior Park, Roscrea and Banagher and Captain C.A. Armstrong of Banagher. Why the inland site of Banagher was chosen thus incurring increased transport costs is perhaps explained by the prospectus of the newly formed company where it was stated:

The company have made a very valuable agreement to purchase the lease in perpetuity at a modest rent of the extensive strong and well built stone premises recently in possession of the Banagher Flax Company together with 11 statute acres and 37 perches of land within half a mile of the town of Banagher, in the King's County, and in the centre of one of the best barley growing districts in the midland counties of Ireland, for the sum of £6,500 including the existing valuable plant and machinery, which together are estimated to have cost £10.000, and are in first-rate condition. Payment of the £6,500 to be made in £3,500 in paid-up shares of the company, and £3,000 in money.

The machinery above mentioned comprises a first class 35 horse power horizontal steam engine, with boiler tubes, and fittings; several hundred feet of 3 inch wrought iron shaftings, six pairs of mill stones and two large water wheels with their accessories, all of which will be available for the purposes of the distillery.

A fine steam runs through the premises, and the quality of the water for distilling has been tested, and proved to be of the best kind for the production of whiskey of first rate quality, while quantity is so abundant as to be capable of affording almost the entire motive power required; and it is estimated that this splendid supply of water power will save the company in fuel alone between £100 and £500 per annum.

There is an abundance of peat close to the estate, so that a plentiful supply of fuel can be obtained at a very low rate. The offer of suitable premises nearly ready to receive plant, and capable of turning out 603,000 gallons in the first year, is highly valuable as it will enable the company to commence operations almost immediately, moreover by the possession of surplus land and abundance of water the size of the distillery can be increased as required. Another great advantage of the situation is in having one of the larger tributary streams of the Shannon running up to within 100 yards of the back of the distillery, where a good landing and private road direct to the works have been made, by which means the company can have the benefit of the free navigation of the Shannon both for getting corn and shipping whiskey at a very trifling cost as the river Shannon itself is within a mile of the distillery; but the calculations in the estimates have been made irrespective of this feature.

The resident directors also had a strong interest in the success of the enterprise, Captain Armstrong was the landlord of the property and F.A. Waller would be supplying the distillery with malt - or so it was intended. The prospectus also noted that the demand for Irish whiskey for export was buoyant. The overall figure confirms this and in the King's County Chronicle (29th January 1874) it was stated that the Tullamore distillery had exported in one week no fewer than 200 casks to one house in Liverpool and that some English connection had ordered 1,200 casks for the following year.

Despite the acquisition of the Banagher Flax Company mill the directors deemed it necessary to embark on a substantial construction programme and contracts were given to Messrs. H. Pontifex of King's Cross, London and Mr. James Oxley of Frome, based on plans provided by Mr. Thomas Holbrook, architect. The building work was completed in Spring 1875 a little late for the distilling season of that year though some distilling was done in May.

The construction work was delayed by a shortage of capital as the share issue had been under-subscribed. According to a circular issued by the board to the shareholders in October 1874 it was noted that 'the distillery when completed would be capable of producing upwards of half-a-million gallons of whiskey per annum. The amount actually laid out of the works and paid for the premises is about £42,000 and about £35,000 are required to meet the payments due under contract to complete the works, and £10,000 for working capital, against which the company have in cash and stock, upwards of £5,000 leaving a balance required of about £40,000! The circular went on: 'the capital of £82,000 will it is confidently expected yield a net profit of at least 15 to 20 per cent.' This appeal to the shareholders (173 in all) did not meet with any worthwhile response and in October 1875 it was resolved that affairs be wound up and the company go into liquidation. Thomas Cave, MP. for Barnstaple was appointed liquidator. He, in fact, obtained permission from the Vice Chancellor to borrow £25,000 to carry on the business. It was at this time that the resident directors, Captain Armstrong and F. A. Waller retired from the board for reasons of a technical nature. By April 1876 the distillery was in full swing under the supervision of Mr. William Peacy, distiller, but for whatever reason, low sales, high costs, or simply pressure from nervous creditors the distillery was offered for sale by public auction in September of that year but no bidding was done.

In June 1877 the debenture holders and creditors agreed to the setting up of a new company to be known as the Banagher Whiskey Distillery Co. Ltd to take over all the assets of the old company. Its nominal share capital was £150,000. The company now enjoyed a few successful years with sales outpacing annual production.

A reasonable profit was made but this was offset by capital expenditure on additions and improvements and when the depression came in the late 1870s and 1880s reverses were probably low and too small to withstand the crisis. In July 1880 some of the principal share holders expressed themselves as anxious to liquidate, a move which the directors opposed. At an extraordinary general meeting in October 1889 it was agreed that the Banagher whiskey Distillery Co. Ltd. be wound up and this was confirmed at another E.G.M. in November 1881. The delay was perhaps caused by difficulty in selling the premises. In the company balance sheet for 1881 the property was valued at £118,585. Commenting on the position, the Midland Tribune stated that the Banagher Distillery was projected by Englishmen and manned by Englishmen. It had cost over £100,000 to build but had not in ten years paid a dividend. When in full work it employed about a tenth of the people of Banagher. The duty payable on one season alone amounted to £300,000 (representing 600,000 gallons) and that over 20,000 gallons of spirits could be produced in ten days. The Tribune also noted the capacity of the stills as 22,000 gallons, 11,000 gallons and 10,000 gallons. This made the Banagher stills considerably larger than those at Kilbeggan or Tullamore and almost certainly Birr as well. In August 1884 the liquidator sold to the mortgages all the loose things in and about the distillery. When for sale notices appeared in the newspapers in December it was stated that the distillery was in full working order and the mortgage on the premises amounted to a quarter of the cost of the concern. However, no sale was effected until September 1887 when the premises was conveyed to Adam Scott a wine merchant for £80,000. Scott took possession as a trustee for a new company, the Banagher Distillery Co. Ltd. and for a few years the place appears to have done well though not without the loss of the head malster who was killed in an accident in October 1887.

The third company to take over Banagher was voluntarily wound up in September 1890 and a new fourth company set up, the Dublin City and Banagher Distilleries Ltd. In its prospectus of April 1890 the nominal share capital was state as £115,000.

Subscriptions were also invited at par for £35,000 first mortgage debentures. The new company was established to acquire the Dublin City Distillery property in course of construction by the vendors with plant to produce not less than 1.5 million gallons annually and also to acquire the Banagher distillery as a going concern. The purchase money for the Great Brunswick Street and Banagher properties together with floating assets was £130,000. The whole share issue was more than fully subscribed in the Dublin area alone. The chairman of the new company was A.S. Findlater. The Dublin plant seems to have had a throughput capacity three times as great as that of Banagher.

Surprisingly, the problem of capital bedevilled this new company as it had done the previous ones. At the report of the adjourned A.G.M. of December 1894 it was stated that at least an additional £15,000 was needed. In January 1896 a trading loss of £5,000 on the year's trading was blamed on the lack of capital during the year and on constantly rising grain prices. At the same meeting the chairman said they had been trying to sell Banagher distillery but had not been successful; with the cost of coal they found production costs greater at Banagher distillery but had not been found unsuitable and the high hopes of economics in fuel because of location at Banagher where peat was plentiful had failed to materialise. Coal seems to have been the favoured fuel in the distilleries until the second war when it became unobtainable and peat had to be used as a substitute.

The absence of source material makes the problem of tracing the history of the Banagher distillery in the late 1890s a little difficult. The Banagher distillery was sold by the Dublin City and Banagher distilleries Syndicate Ltd and operated for the years 1897 and 1898.

It was again closed in 1899 and was put up for auction in June of that year. Nobody wanted to buy Banagher as a 'going' concern and in May 1900 the Chronicle reported that 'parties any way anxious to see the Banagher distillery can if they wish see the three stills at the canal stores, number one capacity 22,000 gallons, number two 11,000 gallons and number three 9,100 together with the large tank capacity 75,000 gallons, mash tuns, machinery etc. all smashed up as old copper and iron and bought by a prosperous marine store dealer. The walls of the building can be seen at Garrycastle.......'

The Dublin City Distillery fared no better on its own and at the 1901 A.G.M. the chairman blamed the loss of that year on the increased cost of material. Other distilleries, he said were passing through critical times and selling at a price that left for no return. The Dublin City Company was wound up in 1905 and a receiver appointed. Daniel E. Williams became the occupier of the malt house section of the Banagher property in 1903 and the rest of the distillery property in 1914. Banagher has always been considered the finest of the Williams maltings and it is hoped to trace its development in a future article.