Strathisla - Glenlivet

Sam and Jay

As far as whisky history goes the history of Strathisla has two parts. The first is the dim, distant past when the distillery was founded in 1786, making it one of the oldest still in existence.¹ The second, and most relevant part, dates from 1950, when Seagrams took over to restore a dilapidated facility and then expand it.  You could argue that the distillery is what it is now because of the vision and investment of Sam Bronfman² and the Chivas years as well as the early years represent the  most significant periods in the distilleries history. But does that mean we have to brush aside the messy bits in the middle?

The take-over by Seagrams in 1950 was not a simple case of Strathisla moving from night to day, or of a sleeping princess being awoken from a long slumber by the kiss of a handsome suitor. History is not a fairy story. It was not a straightforward switch from Mr Dirty to Mr Clean. It is true that the distillery was properly nurtured under the eye of Sam Bronfman,  whereas before it had been neglected. It is true that Sam Bronfman was a proper whisky man who had a detailed knowledge of distilling but there are parallels with the life of Jay Pomeroy than you might expect.

For a start there was their background. Both were Russian Jews whose families lived in the Pale of Settlement. The Bronfman family came from Bessarabia, in what is now Moldova whilst Pomeroy’s came from the Crimea. There was though a significant difference that profoundly affected their identity. Sam Bronfman came to Canada as a baby and was all his life a patriotic Canadian; Jay Pomeroy came to England as a twenty year old and was always identified as a Russian.

They were  both about the same age (Pomeroy was 6 years younger) and both would have been liable for service in the First World War except they were excused military service on medical grounds. Bronfman had flat feet,  whilst for Pomeroy it something more serious, though undisclosed, because his record was marked “permanently and totally unfit”. Goodness knows what it was. Perhaps it had something to do with his heart, which was obviously weak. He had a serious heart attack in 1942 and died from another in 1955 when he was just 60.

They both sought to make their way independently through their own businesses. But here they are not at all similar. Jay Pomeroy was a man alone, whilst Sam Bronfman was surrounded by a close family and started out in the family hotel business, which he later came to dominate, even though he had two older brothers. At the time most Canadian hotels made their all their money from the sale of alcohol in their bars and so Sam got to know the alcohol trade well. It was thus a natural move to set up a company supplying whisky. This is how he progressed and built his businesses –  by building on his core of knowledge and expanding what he knew. He therefore had consistency, a logical thread to what he did, whereas Jay Pomeroy would buy and sell anything, looking for the next good idea. He was not a builder, he was a sole trader, except for those brief, few years when he became an impresario and ran an opera company.

Both sought to profit from loopholes in the law. The history of Sam Bronfman is in many ways the more colourful of the two as he was in the thick of temperance prohibitions and cross-border relationships. It is often forgotten that Canada, as well as the US, had a strong temperance movement and many Provinces went dry before the First World War. Although this was a provincial matter it put the Bronfmans businesses at risk. Sam, though, spotted that sales from out of the province were covered by federal not provincial law. He therefore set up a mail order business based in Montreal, with warehouses in other provinces, and slugged it out with the Hudson Bay Company. Eventually this loophole was tightened so Sam found another one  and sold alcohol through drug stores as medicine. Then there was prohibition in America where Canada was famously the pipeline through which the bootleggers obtained their stock. Sam of course did nothing illegal – he just sold whisky, how was he to know his customers were crooks? This earned his company a lot of money but just like with Jay Pomeroy, the authorities did not forget and later tried to extract some form of retribution.

As a result they both had to fight a number of court cases. Jay lost, Sam won. For example in 1926 he was embroiled in a Royal Commission on Customs and Excise that looked at illegal smuggling and the bribery of officials. He escaped unscathed from this but his brother Harry was prosecuted for bribery. Even though he was found not guilty it was traumatic for the family and the business and became a big political issue in Saskatchewan. The issue of trade in the prohibition years would not go away and a few years later, in 1934, the RCMP prepared charges concerning illegal activities in the prohibition export trade. There was another high profile trial and another acquittal. Sam tended to win things – Jay not so much.

Both of them were a little lax about paying taxes. At the beginning of his business life it seemed to slip Sam’s mind that he needed to pay anything at all. Later his lawyers had to negotiate a settlement, in 1921, to cover his previous negligence. Jay run-in with the tax authorities we know about.

However they were both subject to retrospective claims. The US Treasury, in a rather breathtaking move, tried to recover the tax they thought might be due on the whisky that came into the country from Canada during prohibition. At first it wanted $53 million from all the distilleries involved, with Seagrams liable for $25 million. This was disputed but it was more than a business dispute it was an international issue which had to be negotiated by the two governments. Apparently FDR, himself, was far from convinced his Treasury had a strong legal case and so settled on a figure of $3 million, which then agreed.

These similarities are interesting but superficial because at heart there was a huge material difference between the two men. One was a trader, someone restless in the search of the next deal, but essentially a small scale operator. The other was a highly driven, ruthless businessman who built one of the great business conglomerates of the age. Sam Bronfman in a completely different league. He cared about detail and prided himself on knowing everything about his company. He knew the technical details of making whisky and cared about quality. For Jay Pomeroy whisky was irrelevant, he might just as well have been selling stockings or perfume. He was not in it for the long haul. Sam Bronfman, though, thought strategically.

This crucial difference means there is good reason to restart the history of Strathisla in 1950 and draw a veil over the previous few years. However the similarities in the background of the two men make it amusing that it was Sam Bronfman who took over. The similarities provide a hidden continuity.

Especially as there was one final irony, a twist of fate, from beyond the grave, that united the businesses of both men. Jay, as we know, became consumed with opera, initially under the influence of a beautiful soprano, and lost a lot of his money. Sam was far too austere and driven for any such frivolity – but his heirs? Ha! Show-business exerted a deathly pull.  Sam’s son Edgar, who was the first heir to take over, dropped quite a lot of money on an investment in MGM but that was OK because he also made a deal that gave the company 25% of DuPont, which was a huge cash cow. However when his son Edgar Jr took over he sold the DuPont stake to buy MCA (Universal). It was this deal that ruined the company and is the reason why it no longer exists. Apparently when the MCA deal was going through Edgar said to Edgar Jr “That’s an awful lot of money to pay to get laid.” Jay Pomeroy would have agreed