Social Change in New England 1950-2000 9: Grafton Brewing Company Limited

Following my muse Rural Press, Fairfax and Brian McCarthy, I wrote a short piece Social Change in New England 1950-2000 8: unlisted public companies fleshing out the role of such companies.

In the first post, I mentioned the Grafton Brewing Company as an unlisted public company. Checking, I found that it was certainly listed in 1961 when it was taken over by Tooheys.

I also found an interesting thematic history of Grafton, one that I had not seen before: Brett J. Stubbs, A Thematic History of the City of Grafton, Volume 2 of Community-based Heritage Study, Clarence Valley Council & NSW Heritage Office, December 2007. Brett's history includes a section on brewing, pp 100-103.

I am take the liberty of quoting the section on brewing, with a comment at the end, looking at Grafton as a bit of a case study on aspects of change.

"4.4 Brewing Industry

Grafton’s first brewery was started by Robert Muir in 1861, but it was small and short-lived. Muir’s Grafton Brewery was situated near the Dobie Street wharf, across the river from Patrick Fraser’s flour mill. Muir advertised in October that year that he was able to supply ales manufactured ‘solely from the best English malt and hops’.The brewery seems to have ceased operation in 1863.

From the closure of Muir’s brewery until the early 1950s, Grafton obtained practically all of its beer requirements from breweries in Newcastle, Maitland and, most significantly, Sydney. In the late 1940s, however, when the Sydney breweries were slowly recovering from wartime restrictions on production, there existed a general shortage of beer throughout New South Wales, especially outside the capital city. In the north coast region, to which beer was shipped from Sydney by the North Coast Steam Navigation Co., supply was irregular and shortages commonplace. Under these circumstances, plans were commenced for the construction at Grafton of a new brewery to serve the northern part of the state.

Grafton Brewing Company

The Grafton Brewing Company Pty Ltd was incorporated in 1949, and was granted a licence for its Grafton Brewery when construction of this was completed in 1952. Production of beer commenced in November that year, and the first Grafton beer was sold over the counter in Grafton pubs on 18 December. The brewery, situated on the northern side of North Street, was in Copmanhurst Shire, but a northward relocation of the local government boundary in 1957 brought it within the newly-created City of Grafton.

Grafton Brewing became a public company (Grafton Brewing Company Ltd) in 1953, in order to facilitate the raising of extra capital for expansion. At about the same time, the Sydney breweries were beginning to overcome the post-war shortage, and a rail bulk-loading contract enabled them to send beer cheaply to Lismore, the largest centre within Grafton Brewery’s intended distribution area. Resulting strong competition from the Sydney breweries, among other factors, led to the inability of the Grafton Brewery to operate profitably, and in 1961 the company accepted a takeover offer from one of its
city rivals, Tooheys Limited.

Under the brewery’s new owner, Grafton beers were phased out and replaced by Tooheys brands in the 1960s, but production at the Grafton Brewery was greatly increased by the addition of new plant. This included an outdoor ‘tank farm’ of individually refrigerated fermentation and maturation tanks, and
new canning and bottling machinery, all of which were officially opened in December 1968. The canning line processed the first ‘ring-pull’ beer cans produced and sold in New South Wales. The new bottling line enabled the brewery to fill 13 fluid ounce ‘stubbies’ in addition to the usual 26 fluid ounce
bottles, which the existing line handled.

A review of operations at the three Tooheys breweries in New South Wales resulted in major changes at Grafton in 1987. Packaging of beer at the brewery ceased, although it continued to produce bulk (kegged) products. As a consequence, forty of the nearly 200 workers at the brewery were retrenched.This was a better outcome than at the Hunter Brewery at Cardiff (Newcastle), which was closed completely. The much larger brewery at Auburn (Sydney) would produce all Tooheys packaged products.

Figure 4.3 The brewhouse at the Grafton Brewery, 1988. These copper brewing vessels were manufactured by A. Ziemann Breweries of Ludwigsburg, near Stuttgart, Germany. As far as can be ascertained, they were scrapped soon after the closure of the brewery.

Further job losses occurred at the Grafton Brewery in 1991 after Tooheys targetted 41 positions to be cut out of the remaining 157. The brewery received a boost in 1993 with the installation of a new keg line to handle the 50 litre kegs that had become standard elsewhere in the industry.

By mid-1994, the Grafton Brewery employed 95 people, fewer than half of its 1987 workforce, yet further reductions were implemented. A year later only 61 remained. Amid rumours of closure, the brewery’s new operations manager gave assurances that ‘We’re certainly not here to close the brewery down’. Barely a year later, the same operations manager told 42 workers that they were no longer required as the brewery would close completely on 30 May 1997. Reduction in demand for keg beer, on which Grafton Brewery
concentrated, was cited as the reason for the closure.

Figure 4.4 The former Grafton Brewery, 2007"

Ends

Looking at the references, I see that Brett has done a bigger study on NSW brewing: Stubbs, 1996, ‘The Revival and Decline of the Independent Breweries in New South Wales, 1946 to 1961,’Australian Economic History Review 36(1), 32-63.

The web site deListed shows that  Grafton was delisted on 24 July 1961 following its takeover by Tooheys.  According to the State Library of NSW, Toohey  opened the Hunter Brewery at Cardiff in Newcastle in February 1971

Discussion

I was interested to see that war time and immediate post war shortages were one of the drivers in the establishment of the brewery.

I haven't fully scoped the economic impact of the Second World War on New England. Shortages of paper, for example, affected the newspapers. Diversion of ships into naval duties along with losses from Japanese submarines badly damaged the coastal trade. The ending of coastal shipping was one element of change in New England during the fifties.

The commercial challenges that Grafton faced in breaking into the marketplace in the face of bigger competitors were, I think, pretty typical. Of the various New England business interests, I know the media best. Working in a small market place on one side, competing with bigger Sydney based interests for things like advertising on the other, were regular themes in board discussions.

Problems with transport compounded problems. As in the case of Lismore, bulk rail transport rates allowed external suppliers to bring goods in cheaply, while poor roads limited Grafton's access to inland markets. I haven't looked at the costs of road freight Grafton-Armidale as compared to rail freight Sydney-Armidale, but I suspect that rail was cheaper.

Probably of more importance in the case of beer was brewery ownership of hotels. As I remember it, Tooths and Tooheys owned or controlled significant pub chains, giving them something of a market lock-in. I say as I remember it because while I know that they did own or control many pubs, I don't know the distribution across New England. My memory from discussions is that this was a problem in, say, Armidale.

Once Tooheys took over, the fate of the brewery depended on broader corporate decisions.

With the Tooheys takeover, Grafton disappeared as a brand. I don't know the year. It didn't happen immediately, but it did happen. Then there was an initial expansion, followed by contraction that closed both the Cardiff and Grafton breweries.

What I hadn't realised properly until I read Brett's history was the scale of industrial activity in Grafton. This was quite significant. Grafton is actually an interesting microcosm of the nature of industrial change with the consequent social side-effects.

If we look at New England as a whole, there were two quite distinct industrial change processes.

From the end of the Second World War until the 1980s, Australian industry was protected by a system of considerable tariff barriers and quotas. This allowed considerable industrial expansion and especially in the 1950s and 1960s. This provided some benefits to parts of New England at periods. However, as a largely branch office economy, New England was also affected by business restructuring. Here growing industrial and concentration led to changes; ice cream manufacturing in Grafton is a case in point, as is the Grafton Brewery.  

The second major industrial change process came about with the progressive dismantling of trade barriers. From the 1970s, and especially in the 1980s, industry protection was greatly reduced, forcing industrial restructuring. This affected Newcastle in particular. The closure of the BHP plant in 1997 is an example.

These changes affected agriculture as well. Previous industry based marketing regimes were progressively reduced or modified. Certain industries, dairying is an example, experienced very considerable change as a consequence.

An interesting sub-text in both change processes is the way in which previously state-based commercial activities became national. Beer, ice cream and dairy products are all examples.     

In combination, these various changes brought about fundamental change in the patterns of New England life.