We take a look at the men behind the Pattison crash, which took Scotland's whisky industry from boom to bust at the end of the 19th century.

Robert P. Pattison and Walter G.G. Pattison – two names that will forever live in infamy in Scotch whisky circles.

The brothers, who were the catalyst for the collapse of the Scotch industry in the early 1900s, had a fairly understated entry into the world of whisky, though it wasn’t long before they would make their name.

Beginning with the family dairy business, the two brothers joined their father and his partner Alexander Elder as wholesalers before deciding that whisky, which had just entered into a very prosperous period, would be a far more lucrative venture.

At the time Scotch whisky was very much on the rise, with brands like Dewar’s and Johnnie Walker beginning to make their name in England and market rivals claret and cognac having their industries devastated decades earlier by the Great French Wine Blight.

As French and Spanish producers struggled to meet demand, the English gentry naturally followed the lead of their Scottish brethren by turning to the newer, trendier blended whisky in their bid to satisfy their need for spirit.

To the opportunistic Pattisons, this must have seemed like a serendipitous time, and they duly began to blend and sell their own whiskies in a bid to capitalise on this freshly expanding market.

Walter and Robert floated their company on the stock market in 1896 as Pattisons Ltd. Receiving around £150,000 and a large portion of the shares, the pair used the money to expand their business, hiring  a hundred and fifty new salesmen and releasing new products such as their ‘Morning Gallop’ and ‘Morning Dew’ whiskies.

Where this new company differed from the more traditional blending outfits of the time, was through the use of hugely successful jingoistic adverts and an aggressive style of marketing which, as it was ahead of its time, brought the company a new level of notoriety and fame.

Investing around £20,000 in advertising, Pattison’s Ltd played on the British public’s tremendous sense of pride in the ever-growing Empire and its militaristic might.

Pattison Crash

A typical Pattison’s whisky ad. Picture: Wikimedia

They released picture adverts in the press with their brands sitting alongside humorous puns and pictures of the British army and navy and invested in merchandise such as branded glassware, jugs and maps, which they gave out to publicans across the UK.

Their entrepreneurial spirit captured the public imagination and soon they were inventing even more ingenious methods to extol the virtue of their products.

One such campaign, which would be as incredible today as it was back then, saw the Pattison’s team purchasing 500 African Grey parrots, teaching them phrases such as “Pattison’s whisky is best!” and “Buy Pattison’s whisky!”, before sending out their travelling salesmen to give them away to pub owners up and down the country.

Through it all, the brothers were gaining a reputation for extravagance that saw many wonder how they could afford to continue as they were, with money being spent on grand offices, country retreats and private train rides (a massive luxury at the time).

The spending continued unchecked over the next few years with the advertising budget being tripled to £60,000 (virtually unheard of in Victorian times), and stakes being bought in single malt distilleries -such as Glenfarclas, Aultmore and Oban – grain distilleries, and even an Edinburgh brewery.

Picture: www.glenlochy.com

However, as predicted by all of the whispering naysayers (when one creditor, the Distillers Company Ltd were asked about the Pattison’s finances, they described them as “very doubtful”), the good times couldn’t last, not just for the Pattisons, but for their business too.

What most couldn’t have predicted though, would have been just how destructive the fall would prove to be.

In 1898, the firm owed money to DCL and were struggling to secure credit from the bank, who had by now withdrawn their support.

Worse, in December that year, the firm collapsed entirely after it was discovered that not only was their spending out of control but they’d been fudging the numbers as well.

The books had been so thoroughly overcooked and the value of their stock so over inflated, that any rescue attempt was doomed to failure.

And, as the company plunged into liquidation, the stories kept coming. It seemed the duo had also been tampering with their products, in one example they had been caught using cheap Irish whiskey mixed with a small measure of higher quality Scottish stock and passing it off “Fine old Glenlivet”, with Glenlivet – the name of the Speyside region at the time – being considered a watch word for excellence.

A Scotsman newspaper leader column from the time referred to it as a “sordid business”.

A second newspaper reported that by the time the discovery about the accounts had been made, the public had been swindled to the “tune of a good many thousand of pounds”.

Though the two were eventually tried at court in 1901 for embezzlement and fraud, and sentenced to 18 months (Robert) and 9 months (Walter), the public did not react kindly to the sentencing, which they believed was far too lenient when compared to other offenders who had engaged in far less serious acts.

Picture: www.glenlochy.com

A newspaper reporting on the issue referred to the matter as “requiring reform” and that until such time as that reform came “the law would continue to trounce the little rogues and deal tenderly with the bigger ones”.

The immediate effect seemed fairly localised, with the company winding up and the brothers tried for their crimes, but the whole affair had a domino effect and soon other companies began to suffer, with unsecured creditors also struggling under the stranglehold of the Pattison’s folly.

Many other businesses fell into a decline as a result, with several of the smaller suppliers folding. The ripples of the crash soon spread even further as news of the tampering with the whisky spread and the reputation of the blending industry taking a huge hit.

The reaction that followed was so severe that the entire bubble surrounding the whisky industry burst and the good times were most assuredly then over.

Though they recovered slightly in the years before World War One, it would not be until the 1950s onward and the post war years of the second world war that Scotch whisky would truly bounce back, indeed in the nearly fifty years between the Pattison crash and the ending of the World War Two, no new Scottish distilleries had been built.

Thankfully, the industry learned a powerful lesson in maintaining its quality and reputation above all else, leading to the return of the good times and far more cautious industry.

• No parrots were harmed in the writing of this article

 

About The Author

Sean Murphy

Driven by a passion for all things whisky-related, Sean writes for The Scotsman extensively on the subject. He can also sometimes be found behind the bar at the world famous Potstill bar in Glasgow where he continues to enhance his whisky knowledge built up over six years advising customers from all over the world on the wonders of our national drink.

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