The tale of brothers Robert Paterson Pattison (born 24th May 1858) and Walter Gilchrist Gray Pattison (born 23rd May 1860) is also referred as the Whisky Crash that occurred in the late 19th century, and was responsible for the end of the 1st golden era of the Scotch whisky industry in the late 1800’s.
The “Pattison Crash” disrupted the Scotch whisky industry at the time with an initial softening in whisky prices which in turn, triggered a cascade of closures, contractions, and output reductions to below 24 million gallons. In 1906, this equated to a reduction of nearly one-third in just nine years.
Prior to it, the Scotch whisky industry had been experiencing a boom period, which had benefitted from some historical events:
- the 1823 Excise Act – sanctioning the distilling of whisky in return for a licence fee and a set payment per gallon of proof spirit;
- in 1831, Aeneas Coffey invented the Patent Still which enabled a continuous process of distillation to take place and grain whisky to be produced;
- the 1860 Spirits Act – allowing for the first time the blending of spirits under bond without payment of duty, the storage of blended spirits in vats, and the filling of casks with blended spirit in bond;
- in the 1880s, the phylloxera beetle devastated French vineyards, and within a few years, wine and brandy had virtually disappeared from cellars everywhere;
- in the late 19th century, the original Whisky Barons of James Buchanan (Black & White), Tommy Dewar (Dewar’s), James Stevenson (Johnnie Walker) and Peter Mackie (White Horse) marketed their own brands of Blended scotch whisky and the category as a whole, increasing the accessibility of Scotch to the population with a more drinkable and consistent product than previously, through in effect, casks of peated malt whisky at high strength.
One of the founding fathers of blending scotch whisky was Andrew Usher of Edinburgh, who ‘vatted’ samples of The Glenlivet on his day probably following the idea from France of mixing old and new brandies. As reported on the article:
“The blending of whiskies began about 1853 when the firms of Ushers in Edinburgh, who were agents for Smith’s Glenlivet whiskies, mixed several, some no doubt better than others, to make Ushers Old Vatted Glenlivet whisky” RJS McDowall – The Whiskies of Scotland (1967)
Pattison, Elder & Co was formed in 1882 and began marketing their blended scotch brands such as ‘Morning Gallop’ and ‘Morning Dew’ whiskies in 1887. Brothers Walter and Robert Pattison eventually floated their company on the stock market in 1896 as Pattisons Ltd and having received a large amount of funding and portion of the shares, the pair used the money to expand their business.
At this point in time, as reported by writer Gavin D. Smith, “overall Scotch whisky output had reached a peak of almost 36 million gallons in 1899.”
The entrepreneurial spirit of the Pattison brothers led to some extravagant spending on advertising and stakes being bought in single malt distilleries, grain distilleries and an Edinburgh brewery. Creditors such as DCL eventually came calling in and the company plunged into liquidation as the value of their stocks had been over inflated. The brothers were eventually found to be guilty of embezzlement and fraud in 1901 but the whole affair created a domino effect, with question marks on the quality of the product available and true demand for scotch whisky against the available stocks.
Many companies went into decline and the whisky industry boom bubble was truly burst, noting that 159 Scotch whisky distilleries were operational in 1900 and that number fell to just 15 in 1933.
“…so large were their transactions and so wide their ramifications that they infused into the trade a reckless disregard of the most elementary rules of sound business… Investors and speculators of the worst kind were drawn into the vortex and vied with each other in their race for riches.” DCL’s chairman and managing director WH Ross (from Scotchwhisky.com)
Want to know more? There is plenty of material online as well as videos and books on this topic.
Justine Hazlehurst (@kaskwhisky) has made available an excellent video on the Leith Whisky Trail focused on the Pattison Brothers for just £2.99 – this gives a more in-depth look into the Pattison brothers, the whisky crash and Leith – the video was originally made available on the weekend starting on 23rd May 2020 to coincide with the birthday of the brothers.
Jim Brown and Louis Reps have also launched a book on the Pattison Brothers in 2020 ‘The Rise and Fall of Pattisons Whisky of Leith’, providing additional material not seen before by a wider audience and an opportunity for a reconsideration of the current theme of blaming one company for the demise of the Scotch whisky industry at the time (pictured below).
- Book: The Rise and Fall of Pattison Whisky of Leith by Jim Brown & Louis Reps
- Book: The Whisky Distilleries of the United Kingdom by Alfred Barnard
- Book: The Whisky Barons by Allen Andrews
- Video: Leith Whisky Trail: The Pattison Crash
- Peaks and Throughs of the Scotch Whisky Industry 1900-Present Day (Part 1) by Gavin D. Smith
- The Pattison Brothers – Scotchwhisky.com by Gavin D. Smith