Tooth and Co.

Tooth and Co. was the major brewer of beer in New South Wales, Australia. The company owned a large brewery on Broadway in Sydney from 1835 until 1985, known as the Kent Brewery.

A listed company, (ASX Code: TTH) historically one of Australia’s oldest companies. Established as a partnership in 1835, listed on the then Sydney Stock Exchange, July 1961.

Beginnings:

"Source: Abridged from Brewing Tooth and Reschs Beer; (Tooth & Co., July 1973); (Unpublished)"

John Tooth emigrated to Australia in the early eighteen-thirties, traded for a time as a general merchant, and then, in 1835, with a his brother-in-law, John Newnham, opened a brewery in Sydney.

The trademark was based on The Battle Standard of two Saxon Chiefs, Hengist (stallion) and Horsa (horse) who invaded Britain more than 1,400 years ago.

Hengis and Horsa’s expeditionary force of Saxons, Angles and Jutes from Germany landed at Ebbsfleet, Kent in 449 AD.

On the crowning of Hengist’s son, Eric, as the first King of Kent, a white horse, the standard of the ancient Saxons, became the emblem of Kent. It was adopted in more modern times as the Ensign of Kentish Units in the British Army.

John Tooth, who was born in Kent made the White Horse Rampant his company’s trademark. He named the brewery Kent Brewery. The White Horse Rampant remains to this day over the entrance gates at 26 Broadway, Sydney.

History

Established in 1835, by Robert Tooth and John Newnham and was incorporated as a company in 1888. The Tooth family had interests in banking, agriculture and real estate and could afford to support their brewing operations through the turbulent times of the late 19th Century, enabling the brewer to become the dominant maker of beer into the 20th Century. The company is still listed on Australian Securities Exchange today although it is rarely traded, and is but a shell having none of Tooth's former glory.

Tooth's major asset was Kent Brewery, although Tooth had numerous other assets; it owned "Blue Bow Cordials" (which later produced Blue Bow Lemonade), it acquired the "Maltings" at Mittagong in 1905 [Sydney Morning Herald, " [http://www.smh.com.au/news/New-South-Wales/Mittagong/2005/02/17/1108500197660.html Mittagong] " 8 February 2004.] , "Maltings" at Carlton Street, Sydney, the "Reschs Waverley Brewery" in 1921 [ Guide to Australian Business records, [http://www.gabr.net.au/biogs/ABE0155b.htm Tooth and Co] . Accessed 5 November 2007.] , numerous hotels and considerable land. Tooth owned the New South Wales franchise of Hungry Jacks, although it failed to exploit the franchise. It also owned the "d'Albora Marina". For a short period from 1978 it also owned the "Courage Brewery" in Victoria, and a brewery at Tuncester, near Lismore New South Wales. For a period it owned Penfolds Wines, and Penfolds' subsidiary, the "Koala Motel Chain". The Tooth family is also famous for building the 'Swifts' mansion at Darling Point in Sydney. [ [http://www.aussieheritage.com.au/listings/nsw/Darling%20Point/TheSwifts/7863 The Swifts, Darling Point] . Aussie Heritage, Accessed 8 November 2007.]

Financial Position

"Financial Statements"(Important but No Details)For financial statements refer Annual Reports. These may be available from Powerhouse Museum. Refer also sources mentioned below.

"Balance Sheet"Tooth held enormous amounts of property and raw materials, and these made the company especially attractive to predators. At the time the predators were called Asset Strippers, not unlike the Private Equity firms, KKR and Allco today (2008).

In an interesting parallel, the various Asset Strippers (for example Adsteam, Bond, et al) borrowed heavily for their funding. When interest rates rose, they were out of depth and failed. Compare especially Allco, (which made a bid, which was to be funded by debt, for Qantas,) has liquidity problems because of the interest rates.

"Cash Flow"(At the time, cash flow would not have been reported in the financial statements.)When Tooth made acquisitions, it often relied on tapping into its cash flow, rather than taking on debt. (What was the board doing at the time???)

Tooth did try to diversify, as late as 1974. But the acquisitions of Penfolds and others were funded from cash flow, rather than debt. [Note: Compare Telstra (2008), which recently restructured to borrow funds to pay a dividend.] This would imply firstly that the shareholders would have missed a larger dividend, and secondly that the gearing of the company would remain low. These actions would make the company more attractive to a predator.

"Inventory"Tom Watson, the long term manager, set aside massive quantities of raw materials in case of a disaster, such as a drought. The company kept more than one year’s supply of hops in a dedicated refrigerated building in Carlton Street, Sydney. There were also extensive stocks of malted barley siloed at various sites.

"Company Structure"(No Details)Refer annual reports. (It is possible that the individual breweries, and hotels were part of Tooth & Co Ltd, rather than being separate legal entities.)

Early years

Kent Brewery was built on Blackwattle Creek in 1835. The original Tooth and Co produced many beers, of which only two remain on the market - KB Lager and Kent Old Brown. Kent brewery was substantially damaged by a fire in about 1900. In 1921, Tooth and Co. took over Reschs Ltd and their "Waverley" brewery on South Dowling Street in Redfern. Acquisition was conditional that Tooth would not change the original recipe for Reschs Beer. Tooth later made an unsuccessful attempt to acquire the Millers Brewery (Owned by trucking magnate RW Miller), located at Taverner's Hill in Sydney. In 1967, Millers Brewery was sold to rivals, Tooheys Ltd. [ [http://archive.amol.org.au/newcastle/greta/rwmco.html Summary of RW Miller Co.] Newcastle Regional Museum, accessed 8 November 2007.]

"Note on Technology:"There are two types of beers: Ale, and Lager. "Ale" is made by an older process, using a yeast culture (Saccharomyces Cerevisiae) that floats to the surface during fermentation. It must be manually skimmed from the top of an open fermentation tank. "Lager" is made using a newer process that uses a yeast culture that sinks (S. Carlsbergensis), so that the beer can be removed by pumping. Being a mechanical operation, the new process is less labour intensive. Further, the lager is made in enclosed tanks, which are not exposed to the atmosphere. Because it is necessary to skim the yeast, Ale must be made in open tanks, and they are susceptible to bacterial contamination. Formulation and fermentation temperatures are also different.

Stout is a beer made by top fermentation using a malt that has been scorched. Ale=Old; Lager=New.

Corporate culture

To a large extent the culture was dominated by experiences during the 1929 depression. Tom Watson, having experienced the depression, was appointed after the depression, and would remain the General Manager for about 40 years. Anecdotes indicate that Watson apparently had poor person-skills, and reputedly ran the company like a school headmaster. Under Watson’s stewardship, Tooth would not take on debt, in case a spate of high interest rates would cripple the company. [Note that if a company takes on debt, it must repay interest charges on that debt. Should the company default on interest, it is left to the mercy of the bank that lent it the moneys.] Compare a modern company, where it is assumed that debts held are a part of life, the duty of the management being to provide a reasonable balance between debt and the shareholders equity.

The lack of debt would make, -and ultimately did make- Tooth an attractive takeover target. Further the high stock levels would have weighed down on the company’s balance sheet. For a modern company, both the lack of debt, and large amounts of inert stock would be seen as undesirable. A predator could use Tooth’s equity to borrow additional funds. It is a touch of irony, that, when a predator did eventually acquire Tooth, interest rates rose aggressively, forcing the predator into an asset fire sale.

Tooth was rather secretive, and avoided the press despite The Sydney Morning Herald being a near neighbour to the brewery. The Press would come to call the Kent Brewery, with its high anechoic walls, the "Vatican".Fact|date=November 2007

(Annual Reports through to 1974). Tooth usually relied on cash flow to make acquisitions, but the same practice meant that the company would be vulnerable to predators.Fact|date=November 2007 In 1975, Tooth reconstructed brewing facilities at Irving Street, Sydney. The reconstruction was funded from cashflow. Between 1976 and 1982, Tooth and Co. owned Penfolds winery. As indication of the conservative financial status of Tooth, the acquisition was funded by tightening credit terms with the hoteliers from 90 days down to 30 days. For information, Penfolds was later acquired by Southcorp Ltd, which was subsequently acquired by Fosters Group Ltd

Between 1975 and 1980, Tooth made numerous acquisitions, two of which were Wright-Heaton Pty Ltd (a catering firm), and Budge Refrigeration. At the time Tooth considered itself as being in the Leisure Industry.

Expansion into Victoria

Tooth relied primarily on the pub industry, however clubs were becoming increasingly important as a liquor outlet. The clubs were supplied by Courage Brewery in Victoria, which meant that Tooth was losing ground. In 1978, Tooth acquired the Courage Brewery in Victoria, signifying a major move into the Victorian market. ["Altered States". [http://www.smh.com.au/news/national/altered-states/2005/09/30/1127804662742.html Sydney Morning Herald] , 1 October 2005.]

Tooth was losing business to the takeaway packaged beer market, and established Bottle-Mart, whose original spokesman was the comedian Spike Milligan.

In 1978, Tooth constructed a brewery at Lismore, NSW.

Museum

Tooth established and maintained a comprehensive brewing museum at its Kent Brewery. The contents of the museum have since been donated to the Powerhouse Museum, located in Harris Street Ultimo. Part of the contents are now on permanent display at the Powerhouse Museum.

Trade Mark, Late 1970's

In the early 1970s, in an apparent attempt to modernise the image of the company, the (image of the) White Horse Rampant had been secretly gelded. The more observant staff of the company noticed the change, and saw it as a portent of things to come. Subsequently, the trademark was changed, with some fanfare, to a stylised (but still sterile) horse head, as shown on the label shown above. A more recent annual report (Annual Report 1995) showed both the gelding, and a knight, poorly located on the corner of a chess board.

taff Facilities and Benefits

Tooth offered numerous staff benefits. The company offered a Ten Pound marriage bonus to those employees getting married while in the company’s service. Leave was four weeks per year, with 50% loading. Although there was no formal superannuation available, employees retiring from the company “would be provided for” on confidential terms.

There was a staff social club coordinated by Kent Brewery. Following restructuring circa 1975, Tooth had a gymnasium (at Kent Brewery), “Wet” canteen (Kent and Waverley Breweries) a (non-technical) reading room/library. The social club also purchased an old fishing boat, sponsored by the company.

The social club published a magazine called Tooth Topics. Copies are still in circulation and may contain information which could be of use to researchers.

"The Honeypot"Employees had a generous ration of beer at morning tea (called the beer break), lunch, afternoon tea and when they clocked off. Some of the trade supervisors were able to float between bars during the day, eventually leading to a permanent state of inebriation. The brewery had several bars, although plant operators could tap a leaking cask for their own enjoyment. The cask was called the honeypot. Tooth unsuccessfully sought a ruling from the Industrial Relations Commission, that the honeypot would be banned. The ruling was that a precedent had been set. Subsequently an inebriated operator, while travelling home, was hit by a train. Tooth successfully appealed the IRC decision. The honeypot was banned. Tooth would issue plastic tokens, allowing the employee to take home one carton of beer, per week, for his private enjoyment. That arrangement ended with CUB.

In an apparent contradiction, Tooth would not tolerate drunkenness among its staff. Depending on perceived value to the company, alcoholism could either lead to summary dismissal, or to a drying out period at a clinic.

Impact of the Trade Practices Act (1974)

Before 1974, Tooth relied on a handshake agreement with its interstate rivals that they would not intrude in each other's territories. Further, Tooth's hotels were "tied", that is, the licencee was bound to market Tooth Beers. Both of these practices would be outlawed under the Commonweath Trade Practices Act in 1974. Tooth appointed McKinsey and Company, a management consultant firm, to review its procedures. The McKinsey review was headed by Fred Hilmer, a strong advocate of free competition. Following the review, Tooth made a number of structural changes. McKinsey generally followed the Harvard school of thought that the company should use external consultants for its non-core activities (compare the management style of Warwick Fairfax, FXJ, between 1987 and 1990). Between 1975 and 1981, Tooth made a number of smaller acquisitions, in an apparent attempt to reduce its dependence on breweries and the tied hotels.Fact|date=February 2008

Takeover

Tooth saw the weakness in its financial position, and took some action to avert being a takeover target. It attempted a reverse takeover of LJ Hooker Ltd, so as to acquire Hooker's expertise in managing the land holdings. The takeover failed. In 1981, a controlling interest in Tooth and Co. Ltd was acquired by David Jones (Properties) Pty Ltd, then a division of the Adelaide Steamship Company. (Adsteam was a corporate raider and asset stripper.) Subsequently, Adsteam in 1983 sold the brewing interests to Carlton and United Brewery (CUB). ["Inside Business, marketing at Fosters". [http://hscbusinessstudies.com.au/n0604.doc HSC Business studies] , Accessed 8 November 2007.] Victoria Bitter, Fosters, Cascade Light and Stirling Light were then brewed at Kent Brewery.

The three ugly sisters

Under high prevailing interest rates, Adelaide Steam had high debt levels (gearing). Under the pressure of its debt, Adelaide Steam was forced to liquidate all tangible assets, although its bankers had agreed to an orderly sale. The disposal started in 1991, and concluded on 24th December 1999 when Adelaide Steam, under its new name Residual Assco Ltd, was delisted.

As part of the bail-out, in 1993, Woolworths, another company that had been acquired by Adelaide Steam, was relisted. Adelaide Steam made a substantial profit on the sale of Woolworths, and for the sake of taxation, tried to offset the gain against losses made elsewhere. Adelaide Steam relied on a complex arrangement of companies, including the still-listed Tooth & Co, to justify the offset. The Australian Taxation Office did not agree that the gains could be offset in this manner, and argued that additional taxation should be paid. Because of the way Adelaide Steam was constructed, the onus for payment fell on Tooth.

Residual Assco Ltd (The then-renamed Adelaide Steam) was worthless, but because of its relationship to Tooth, still remains in existence. David Jones had been listed in 1985, but a separate part of that company, associated with the formal ownership of Tooth and equally worthless, still remains. That company was renamed DJL Ltd, however it has no relationship with the David Jones department stores. Pending the outcome of the taxation ruling the three companies must remain in limbo. Tooth as a listed company must publish an annual report. Each year, the three companies go through the formality of an Annual General Meeting. (See for example AGM 8th November 2006). The meeting in regard to the three worthless companies would take about twenty minutes. The minutes of the meeting are presented in a plain form, in a manner suggesting three witches about a cauldron in a darkened room. On this basis, analysts and the press have named the three companies; Residual Assco, DJL, and Tooth, as the three ugly sisters. [Australian Financial Review, 24 December 1999.]

Possible sources for further research.

Powerhouse Museum (Fees and/or accreditation may apply): In addition to the standing display, the Powerhouse Museum is custodian to what was the Tooth & Co Museum.

Fairfax: (Fees may apply): Using the dates supplied, check the Fairfax archives of the Sun, the Sydney Morning Herald, and The Australian Financial Review.

News Corporation: (Fees may apply). Using the dates supplied, check the News Corporation archives of the Daily Mirror and the Daily Telegraph. From Time to time, News Corporation runs an historical feature, possibly held in reserve.

State Library of NSW: (Accreditation of bine-fide research may be required). With luck, the State Library holds Annual Reports.

Hahn

Staff from the Kent and Waverley breweries founded several small boutique breweries: Dr Charles "Chuck" Hahn, who was production manager at Tooth, founded the Hahn Brewery in Pyrmont Bridge Road, Pyrmont. A syndicate of brewers founded the Pumphouse Brewery in Darling Harbour. The two fledgling breweries were physically close and shared technology. A third brewery was established at Old Sydney Town near Gosford. Hahn was subsequently acquired by Lion Nathan Ltd, ["Our History". [http://www.lion-nathan.com/Great-Company/About-Us/History.aspx Lion Nathan] . Accessed 5 November 2007.] and the Pumphouse brewery site has been redeveloped.

Today

In early 2005, CUB closed the massive Kent Brewery, with all CUB beers in NSW now sourced from Queensland and Victoria. The brewery site is awaiting redevelopment into housing, with the exception of a heritage chimney and a gate. The gate still bears the trademark or Invicta the rampant stallion. (It is entire.)

The Maltings at Carlton Street, Sydney, and at Mittagong were magaged by three brothers Ernest, Clarrie and Arthur Jones. Their Father Henry was also the original manager of the Maltings from 1905 until his death in 1928. The Jones family had a combined service to Tooth and Co of well over 150 years. Mittagong Maltings had a considerable land holding, although much of the land was sold for a peppercorn to an adjacent girls school. Mittagong Maltings had three separate buildings, one destroyed by a fire in 1965. The other two are now abandoned, having closed in 1981 [Australian Heritage, [http://www.heritageaustralia.com.au/search.php?state=NSW&region=103&view=719 Mittagong] . Accessed 5 November, 2007] .

Waverley Brewery and the Blue Bow site have been redeveloped as housing. The Kent Brewery Site is earmarked for redevelopment, although the redevelopment has been controversial. The Mittagong Maltings is in a state of disrepair and has been considerably vandalised.

The Lismore Brewery did commence production, and was intended to cover distribution of regions North of Tooheys Grafton Brewery. But as soon as production commenced, Tooheys acquired Castlemaine XXXX brewery, so the distribution potential for a brewery at Lismore became locked in. Tooheys and Castlemaine are now part of the Lion Nathan Brewing group.

Tooth and Co. Ltd itself is still a listed company, although a mere shell of what it has been. The shares are illiquid; all assets have been sold off, and cash assets frozen pending a dispute with the Australian Taxation Office. It has no employees. It annual report can be viewed at the Australian Securities Exchange Website and includes a description of the complicated arrangements with Australian Taxation Office.

The beer KB, no longer associated with Tooth and Company, has recently been popularised amongst the younger demographic by the fictional beer-swilling Rugby League Legend Reg Reagan as his beer of choice.

Beers

* KB Lager- named after the 'Kent Brewery', once one of the most popular beers in NSW, now produced in small amounts by Carlton & United (CUB)
* Kent Old Brown- a brown ale, different in style from the darker and sweeter Old Black Ale brewed by Tooheys. Kent Old Brown is still available in bottles, but not very common on tap. It is most common on tap in Newcastle.
* Reschs Pilsner- originally brewed by Reschs brewery until it was taken over by Tooth and Co. in 1929. It was once a very popular NSW beer, but has been tarnished by a criminal lack of advertisement by CUB (often referred to as an "Old Man" beer, as it is most popular with the 40+ demographic). Old advertisements depicting Rugby League players from the 1930s to the 1960s, with the tagline "Reschs Refreshes", are now considered collectors items. With the current fashion of being "retro" in Australia, Reschs Pilsner is becoming more popular with a young demographic, and is available throughout Sydney, and other major centres of NSW (eg. Newcastle, Wollongong).In the 80s Reschs Pilsner was popular with tow truck operators and panel beaters.
* Reschs Dinner Ale (DA)- available in 'longneck' bottles only. This beer accompanies traditional 1980s working class dinners particularly well, and is thought to be the finest of Edmond Resch's creations. As of September 2007 CUB have stopped production of Reschs DA.Fact|date=November 2007
* Reschs Draught is readily available on tap in New South Wales (outside the Riverina district)

Pub Paintings

A feature of Tooth and Co. was the painting of large pub paintings in the 1930s and 1940's, unique to NSW. These pub paintings sought to advertise beer by associating it with sport, health and cultural sophistication. Tooth and Co. owned hundreds of pubs throughout NSW at the time and sought to decorate many with these paintings. Many of these have now disappeared from pub walls and are highly sought as souvenirs of the era.

War Stories

Blue Bow had a small bottling machine, and crown seals were aligned and fed to the top of the bottle, and when so aligned a mechanical hammer would punch down and seal the bottle. When a crown seal became jammed, an operator, using his finger tried to unjam the seal. Bang wenty the hammer and the operator lost his finger to the machine. Subsequently, the DIR conducted an investigation. The Blue Bow manager showed the inspector the machine and how it worked. Then he inserted his finger to show how the accident happened...

The company was fraught with industrial problems. Tooth had a major contract with David's Holdings to supply beer. At the end of a day's work, the truck drivers would return to the wet bar at the brewery. One night, a driver asked the barman for another beer. He was refused: "You're pissed!" said the barman. The drivers decided to strike until an apology was received from the barman. This lead to a standoff: the barman was a salaried person, and none of the staff from the brewery felt that an apology would be appropriate. The next morning, telegrams were sent to all striking drivers, advising that, if they had not resumed work by 11 am on the following day, they would be dismissed, and contract drivers would be used in their stead. The staff had been briefed that the matter would be dealt with by the Industrial Relations Court, and if a ruling were given against the company, then the company would appeal to a higher court. At 11.01 am that day, Contract Drivers brought their trucks into the brewery. Those stiking drivers that decided to return to work were advised that they had already been sacked. ("Didn't you get the telegram?") Subsequently the IR Court ruled that the sackings were fair, and a severance payment was agreed. For some years after that, the brewery worked harmoniously and without industrial problems. The manager (Wayne Gilbert(?)) achieved further notoriety when he sacked the workers at SEQEB in Queensland using a similar strategy. (Refer Joh Bjelke-Peterson), and again further notoriety when there was a meltdown of the Mercury Electricity system in New Zealand.

References

Other sources

* [http://www.powerhousemuseum.com/pdf/education/teachersnotes/brewing.pdf Powerhouse Museum Brewing and Pubs exhibition]
* [http://www.gabr.net.au/biogs/ABE0155b.htm Guide to Australian business records]
* [http://www.smh.com.au/articles/2003/04/14/1050172537789.html Sydney Morning Herald: Closing time at the old Kent brewery]


Wikimedia Foundation. 2010.

Look at other dictionaries:

  • Tooth and nail — Tooth Tooth (t[=oo]th), n.; pl. {Teeth} (t[=e]th). [OE. toth,tooth, AS. t[=o][eth]; akin to OFries. t[=o]th, OS. & D. tand, OHG. zang, zan, G. zahn, Icel. t[ o]nn, Sw. & Dan. tand, Goth. tumpus, Lith. dantis, W. dant, L. dens, dentis, Gr. odoy s …   The Collaborative International Dictionary of English

  • Tooth and Nail — Tooth And Nail …   Википедия

  • Tooth and Claw — could refer to:*Tooth and Claw (Doctor Who), a television episode *Tooth and Claw (short story collection), by T.C. Boyle *Tooth and Claw (novel), by Jo Walton *Tooth and Claw (1998 novel), by Stephen Moore …   Wikipedia

  • Tooth and Nail (disambiguation) — Tooth and Nail is a 1984 album by heavy metal band DokkenTooth and Nail may also refer to:* Tooth and Nail (novel), a 1992 novel by Ian Rankin * Tooth and Nail (film), a 2007 horror film * Tooth Nail Records, a record label founded in 1993 …   Wikipedia

  • Tooth and Nail — Album par Dokken Sortie 13 septembre 1984 Enregistrement 1984 Durée 37 minutes 45 secondes Genre Heavy metal …   Wikipédia en Français

  • tooth and nail — tooth′ and nail′ adv. with all one s resources or energy; fiercely …   From formal English to slang

  • tooth and egg — obs. corr. of tutenag, zinc …   Useful english dictionary

  • Tooth and Claw (Doctor Who) — Infobox Doctor Who episode number=173 serial name= Tooth and Claw show=DW caption=The werewolf attacks Queen Victoria moments before being hit by the moonlight, focused through the telescope and the diamond. type=episode doctor=David Tennant… …   Wikipedia

  • tooth and nail — adverb with force and ferocity she fought tooth and nail * * * adverb : with every available means of attack or defense : all out, fiercely swallowed their gallant words and fought the measure tooth and nail C.G.Bowers * * * with all one s… …   Useful english dictionary

  • Tooth and Consequences — Infobox Television episode Title = Tooth and Consequences Series = The Twilight Zone Caption = Scene from Tooth and Consequences Season = 1 Episode = 16, Segment 3 Airdate = January 31, 1986 Production = 47 Writer = Haskell Barkin Director =… …   Wikipedia


Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.