The distilling industry in Offaly 1780-1954 (Part 3)

(Reprinted from Harman Murtagh (ed.), Irish Midland Studies: Essays in honour of N. W. English, Athlone 1980, pp 213-228. Copyright reserved for private use only.)

Part 3
THE BANAGHER DISTILLERY FAILURE,
1873-98

The late 1860s and 1870s saw considerable expansion in the industry after a period of decline from the 1840s caused principally by the temperance campaign and by frequent and heavy increases in the spirit duty, which rose from 2s. 8d. p.p.g. in 1840 to 10s. in 1862. Thereafter the spirit duty remained steady for almost fifty years until it was raised from 10s. to 14s. 9d. in 1909. The expansion in the distilling industry is all the more interesting because it was an export-based recovery and came at a time when most Irish industries were succumbing to foreign competition. As Cullen noted, exports of whiskey doubled between the 1860s and the 1870s, doubled again by the 1890s and yet again by the first decade of the twentieth century, or from one million gallons in the 1860s to 8.5 million gallons in 1907 — two-thirds of Irish output in that year.¹ The number of firms in the industry increased only marginally and the increased output is accounted for by participants improving their existing plants. The patent still distillers, mostly located in the north of Ireland, and catering for the blended whiskey market, were largely responsible for the increased output.²

The 1870s saw capital investment in the industry on a scale even greater than that which had taken place in the 1820s. The Dunville distillery was established in 1869. Power’s distillery at John’s Lane was rebuilt in 1871, while the Phoenix Park distillery was erected in 1878.³ In the midlands, where there were now only three distilleries, substantial improvements took place at Locke’s of Kilbeggan and at Tullamore.⁴ But undoubtedly the most interesting local development was the formation of the Banagher Distillery Co. Ltd. in 1873. It was established with a nominal share capital of £100,000 and a 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 were described as resident Irish directors, F. A. Waller of Prior Park, Roscrea and Banagher, and Captain C. A Armstrong of Banagher.⁵ 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 eleven statute acres and thirty-seven 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 paid-up shares of the company, and £3,000 in money.
The machinery above mentioned comprises a first class thirty-five horse power horizontal steam engine, with boiler, tubes, and fittings; several hundred feet of three-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 purpose of the distillery.
A fine stream 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 whisky of first rate quality, while the 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 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 into 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 whisky 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.⁶

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.⁷ The figures confirm this and in the King’s County Chronicle of 29 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 an 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.⁸ 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. ⁹ 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 on 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 capital of £82,000 will it is confidently expected yield a net profit of at least fifteen to twenty per cent.¹⁰

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 that the company go into liquidation. Thomas Cave, M.P. for Barnstaple, was appointed liquidator.¹¹ He, in fact, obtained permission from the vice-chancellor to borrow £25,000 to carry on the business.¹² 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.’¹³ 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 August of that year; but no bidding was done.¹⁴

In December 1876 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 £150,000.¹⁵ 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 reserves were probably low and too small to withstand the crisis.¹⁶ About July 1880 some of the principal shareholders expressed themselves as anxious to liquidate, a move which the directors opposed.¹⁷ At an extraordinary general meeting in October 1881 it was agreed that the Banagher Whiskey Distillery Co. Ltd. be wound up and this was confirmed at another a.g.m. in November 1881.¹⁸ The delay was perhaps caused by difficulty in selling the premises. In the company balance sheet for 1881 the property was valued at £118,585.¹⁹ Commenting on the position, the recently established Land League paper 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 over 20,000 gallons of spirit 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.²⁰ This made the Banagher stills considerably larger than those at Kilbeggan or Tullamore, and almost certainly Birr as well.²¹ In August 1884 the liquidator sold to the mortgagees all the loose things in and about the distillery.²² When ‘for sale’ notices appeared in the newspapers in December, it was stated that the distillery was in full working order and that the mortgage on the premises amounted to a quarter of the cost of the concern.²³ However no sale was effected until July 1887 when the premises were conveyed to Adam Scott, a wine merchant, for £80,000.²⁴ 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.²⁵

The third company to take over Banagher was voluntarily wound up in July 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 stated 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.²⁶ The chairman of the new company was A. S. Findlater.²⁷ The Dublin plant seems to have had a throughput capacity three times as great as that of Banagher.²⁸

Surprisingly, the problem of capital bedeviled 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.²⁹ 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 than at Dublin.³⁰ Apparently peat had been found unsuitable and the high hopes of economies 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 World War when it became unobtainable and peat had to be used as a substitute.

The absence of source material makes it difficult to trace in detail the history of the Banagher distillery in the late 1890s. However, it was sold by the Dublin City and Banagher Distilleries Co. Ltd. in January 1897 for £9,000 to a fifth company the Whisky Distillers Syndicate Ltd. and operated for the years 1897 and 1898.³¹ It was again closed in 1899 and was put up for auction in June of that year.³² 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 9,000 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…..³³

Not very much is known about the other two Offaly distilleries, particularly Birr, during the 1870s and 1880s, but Barnard’s survey of the Irish distilleries in 1885 provides comparative material. Table 2. The midland distilleries in 1885: output and employment Distillery Output (p.g.) Employment B. Daly, Tullamore 270,000 100 R. & J. Wallace, Birr 200,000 40 John Locke, Kilbeggan 157,200 70 (Based on Barnard, op. cit., pp 389, 394.)

The midland distilleries were all engaged in the production of pot still whiskey (i.e. either a malt whiskey distilled from a mash entirely composed of malted barley or a gram whiskey made from a mixed mash of malted and unmalted grain but subject to three distillations). The midland distillers found a market for their output in Dublin, Belfast, London, Liverpool and the colonies.³⁴ Although in 1883, it was noted in regard to Locke’s that their trade, though extensive in England, was done principally in Ireland, where they were getting a higher price.³⁵

Footnotes

1. Cullen, Econ. hist. Ire, since 1660, pp 157-8.
2. Ibid.
3. Alfred Barnard. The whisky distilleries of the United Kingdom (London. 1887, reprinted, Newton Abbot. 1969. with a new introduction by I.A. Glen), pp 426, 357, 380.
4. Valuation Office, Ely Place. Dublin: see the schedule of improvements in the 1870s in Tullamore town valuation, 1870-88; for Kilbeggan see the manuscript valuation. 1855-83, county district of Mullingar, electoral division of Kilbeggan. The main part of the distillery was situated at 1 Lower Main Street, and carried a valuation of £130 in 1855. Following a request from Locke’s, the valuation was reduced to £100 in 1865 ‘on the grounds of depres-sion in the business of late years’. The former valuation was restored in 1872, when it was reported that the distillery was fully employed. In the same year the valuation on one of Locke’s malt houses was raised from £25 to £39.
5. King’s County Chronicle,13 February 1873.
6. Ibid.
7. Ibid.
8. Ibid., 25 September 1873.
9. Ibid., 18 February 1875 and 29 April 1875.
10. Ibid.. 29 October 1874.
11. D. E. W. L. archive: title deeds of the Midland Maltings Co. Ltd., conveyance of 13 July 1887, Thomas Cave and ors. to Adam Scott (or see memorial 1887 - 38 - 35 in Registry of deeds, Dublin).
12. King’s County Chronicle, 7 December 1876.
13. Ibid., 27 January 1876.
14. Ibid., 13 April 1876, and see recital in conveyance of 13 July 1887, Cave and ors. to Scott.
15. Conveyance of 13 July 1887, Cave and ors. to Scott.
16. King’s County Chronicle, 25 September 1879.
17. Ibid., 8 July 1880.
18. Conveyance of 13 July 1887, Cave and ors. to Scott.
19. King’s County Chronicle, 23 August 1883.
20. Midland Tribune, 12 July 1883.
21. See Barnard, Whisky distilleries, pp 388, 394.
22. Conveyance of 13 July 1887, Cave and ors. to Scott.
23. King’s County Chronicle, 4 September 1884.
24. Conveyance of 13 July 1887, Cave and ors. to Scott.
25. D. E. W. L. archive title deeds of the Midland Maltings Co. Ltd., conveyance of 9 September 1890; Banagher Distilling Co. Ltd. to Dublin City and Banagher Distillery Co. Ltd. (or see memorial, 1890- 44 - 56 in Reg. of deeds); Midland Tribune, 27 October 1887.
26. King’s County Chronicle, 1 May 1890; conveyance. Banagher Distillery Co. Ltd. to Dublin City and Banagher Distilleries Ltd., 9 September 1890.
27. King’s County Chronicle, 15 May 1890.
28. Ibid., 1 May 1890.
29. Ibid., 13 December 1894.
30. Ibid., 2 January 1896.
31. D. E. W. L. archive: title deeds to Midland Maltings Co. Ltd., conveyance, the Dublin City and Banagher Distilleries Ltd. and ors. to the Whisky Distillers Syndicate Ltd.. King’s County Chronicle, 28 January 1897, 3 June 1897, 30 December 1897; Midland Tribune, 30 January 1897; Tullamore and King’s County Independent 4 December 1897.
32. King’s County Chronicle, 19 January 1899, 22 June 1899.
33. Ibid.. 17 May 1900. 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 Co. was wound up in 1905 and a receiver appointed (see King’s County Chronicle, 3 January 1901 and 2 March 1905).
34. King’s County Chronicle, 27 March 1884, 12 April 1883, 4 April 1884.
35. Ibid., 16 August 1883.