ABSTRACT
This chapter compares the role of brands and marketing in two mergers, ‘The Big Amalgamation’ of 1925, when the Distillers Company (DCL) acquired Buchanan-Dewar Ltd and John Walker & Sons Ltd, and the acquisition of DCL by Guinness in 1986. Although the two events occurred in different institutional circumstances, with large financial institutions playing a key role in 1986 and private shareholders predominant in 1925, the trading environment was similar in so far as both mergers were preceded by declining spirit con sumption. Between 1920 and 1925 the home market (61 per cent of total demand) was contracting at 7.5 per cent per year and exports by 1 per cent. Between 1980 and 1985 home demand (16 per cent of total whisky consumption) was falling by 2.2 per cent a year and exports by 2.8 per cent. In both periods changes in the distribution of consumer expenditure were evident, resulting in overproduction of whisky and surplus stocks. Managing decline placed brands and marketing in a strategic position. The chapter begins with the background to ‘The Big Amalgamation’
of 1925. It then considers marketing in the newly formed DCL Group. Both parts utilize the internal documents of the participating firms. The third section looks at the way the parties to the contested acquisi tion of 1986 - DCL, the Argyll Group and Guinness - presented their marketing capabilities to shareholders. The fourth section deals with Guinness’s reorganization of the brands acquired from DCL through its spirit division, United Distillers. These sections rely on sources in the public domain, including bid documentation and statements by senior executives.
