unsporting by counteroffering to distribute any profits his Ogden’s unit ran up over the next four years among all the dealers that handled its brands, with no requirement to boycott Imperial brands in the bargain. Such boldness astonished the sedate British tobacco trade, soon showered with gifts and souvenirs by the interlopers, who also unleashed an unprecedented flurry of advertising and price cuts. This courtship of the British cigarette market would only grow more ardent, the rough-hewn Duke let it be known.
This goading threat did not sweeten the considerable West Country charm of Sir William Wills. The Imps head quickly maneuvered to take over the United Kingdom’s leading tobacco retail chain, shutting out Ogden’s productline, and countered Duke’s efforts to corner the market in Bright leaf, mainstay of the top British brands. When the Wills family put out a peace feeler, Duke turned standoffish, claiming he was occupied just then with the landscaping of his New Jersey Shangri-la. But when Imps signaled that it would be a lively bidder for any worthy tobacco business in the States, Buck understood he was facing a formidable adversary and that an armistice was the only prudent alternative to a financial bloodbath for all.
The agreement as worked out at Wills’s home off Hyde Park in effect created the first global trust. Duke sold Ogden’s to Imperial for a 14 percent stock interest in the British combine; Imps and American Tobacco agreed not to conduct business in each other’s home terrain and indeed swapped exclusive trading rights to each other’s brand names in their domestic markets. With regard to the rest of the world, the two giants joined to form the British-American Tobacco Company (BAT) to sell the Imperial and American brands globally. But Duke, as was his wont, got the lion’s share: two-thirds of the BAT stock and chairmanship of the board.
In short order, British imperial outposts were being surfeited with BAT cigarette brands, and a big new plant was rising in Shanghai to bring cheap smokes to the Asian masses.
V
THE larger he got, the less charitable Buck Duke became. It was not enough, for example, to buy three-quarters of the window display space from the Bewlay chain of tobacco shops; Duke wanted outlets of his own that were unquestionably loyal to his brands and perpetually pushing them and no one else’s. Toward that end, he engaged the services of the Whelan brothers, whose small chain of United Cigar Stores headquartered in Syracuse, New York, was a welcome departure from the dingy old shops, haphazardly stocked and often inconveniently located, that typified much of the retail tobacco trade.
Correctly anticipating that the rest of the retail business would not embrace news of the trust’s entry into the field, the United Cigar deal was consummated secretly. But word of it could not be contained, and dealers were alternately furious and tremulous; mutterings about leagued boycotting of Duke’s brands were detected by the trust managers, who elected to ride out the storm or, in some cases, try to lie their way out. To allay alarm among Boston retailers, for example, Percival Hill, by now Duke’s ranking henchman, wrote toward the end of 1902 to the owners of Estabrook & Eaton, the city’s leading tobacco wholesaler and retailer, that American Tobacco “would be very much pleased if your firm were to become even more influential than it is at present, in a retailway, as a protection against this new company in Boston … . Of course all rumors to the effect that our company is in back of the United Cigar Stores Co. are entirely without foundation.” Six months later, First Vice President Hill was writing to George J. Whelan, president of United Cigar, of his displeasure regarding “the disposition on the part of some of your employees at certain of your stores to further the sale of goods competing with similar goods of our manufacture.” Hill reminded Whelan of the
This goading threat did not sweeten the considerable West Country charm of Sir William Wills. The Imps head quickly maneuvered to take over the United Kingdom’s leading tobacco retail chain, shutting out Ogden’s productline, and countered Duke’s efforts to corner the market in Bright leaf, mainstay of the top British brands. When the Wills family put out a peace feeler, Duke turned standoffish, claiming he was occupied just then with the landscaping of his New Jersey Shangri-la. But when Imps signaled that it would be a lively bidder for any worthy tobacco business in the States, Buck understood he was facing a formidable adversary and that an armistice was the only prudent alternative to a financial bloodbath for all.
The agreement as worked out at Wills’s home off Hyde Park in effect created the first global trust. Duke sold Ogden’s to Imperial for a 14 percent stock interest in the British combine; Imps and American Tobacco agreed not to conduct business in each other’s home terrain and indeed swapped exclusive trading rights to each other’s brand names in their domestic markets. With regard to the rest of the world, the two giants joined to form the British-American Tobacco Company (BAT) to sell the Imperial and American brands globally. But Duke, as was his wont, got the lion’s share: two-thirds of the BAT stock and chairmanship of the board.
In short order, British imperial outposts were being surfeited with BAT cigarette brands, and a big new plant was rising in Shanghai to bring cheap smokes to the Asian masses.
V
THE larger he got, the less charitable Buck Duke became. It was not enough, for example, to buy three-quarters of the window display space from the Bewlay chain of tobacco shops; Duke wanted outlets of his own that were unquestionably loyal to his brands and perpetually pushing them and no one else’s. Toward that end, he engaged the services of the Whelan brothers, whose small chain of United Cigar Stores headquartered in Syracuse, New York, was a welcome departure from the dingy old shops, haphazardly stocked and often inconveniently located, that typified much of the retail tobacco trade.
Correctly anticipating that the rest of the retail business would not embrace news of the trust’s entry into the field, the United Cigar deal was consummated secretly. But word of it could not be contained, and dealers were alternately furious and tremulous; mutterings about leagued boycotting of Duke’s brands were detected by the trust managers, who elected to ride out the storm or, in some cases, try to lie their way out. To allay alarm among Boston retailers, for example, Percival Hill, by now Duke’s ranking henchman, wrote toward the end of 1902 to the owners of Estabrook & Eaton, the city’s leading tobacco wholesaler and retailer, that American Tobacco “would be very much pleased if your firm were to become even more influential than it is at present, in a retailway, as a protection against this new company in Boston … . Of course all rumors to the effect that our company is in back of the United Cigar Stores Co. are entirely without foundation.” Six months later, First Vice President Hill was writing to George J. Whelan, president of United Cigar, of his displeasure regarding “the disposition on the part of some of your employees at certain of your stores to further the sale of goods competing with similar goods of our manufacture.” Hill reminded Whelan of the
Similar Books
