The Pattison Brothers created a whisky empire in a questionably short period of time. Unfortunately, every single empire inevitably leads to failure. Theirs came crumbling down quite spectacularly. 

Starting of life as dairy wholesalers in 1849 and making the move into whisky blending in 1887, under the company Pattison Elder & Company. They made impressive progress, even owning substantial shares and interests in several distilleries: Aultmore, Glenfarclas and Oban.

In my opinion, which I believe is shared with many others. The Brothers were so successful partly down to their very bold marketing and advertising strategies. They were investing more and more each year in their advertising. Don’t get me wrong, marketing and advertising is something that every company needs to become successful. But to increase your budget for advertising from £20,000 in 1897 to £60,000 the following year is taking it to the extreme. It did, however, work.

Their boldest move, was to buy 500 African Grey Parrots and train them to repeat phrases like “buy Pattisons Whisky”, they then proceeded to give these birds to bars and shops around the country. Needless to say, this worked a treat, sales kept going up. It seemed there was nothing in the world that could stop them.

The other reason they were so successful (or merely perceived as being successful) was down to down to the fact that they resorted to selling stocks, which they proceeded to buy back at inflated rates by obtaining bills of exchange which were then discounted. This meant that that valuations on their whisky was hugely over exaggerated. They would also value their property much higher than the actual value, to make it seem that the company was doing fantastically well.

This combined by the fact that they had built the company almost entirely from credit led to their inevitable downfall. The firm collapsed in December 1898, and formal liquidation proceedings began. Almost immediately a deficiency of £500,000 (£62,522,498.85 in today's money) was noticed, and that their entirety of available assists amassed to less than half that sum.  The brothers were sent to jail, it was only a short stint in Carlton jail. Walter was imprisoned for 8 months, meanwhile his brother Robert was jailed for 18 months.

During the sale of their company’s properties the Distillers Company Limited (now Diageo) purchased the Pattison’s warehouses for a third of their valued price! This might be one of the reasons they are now the largest international wine and spirits corporation on the planet!  

The crash did not just affect the brothers and DCL, it affected the entire industry. 10 companies which had done business with the brothers went bankrupt, leading to prices dropping affecting other blenders and even distilleries. It only continued to go downhill after the crash, first there was World War I, and then the USA had their Prohibition (lasting 13 years) after Prohibition it was World War II! Altogether, this meant that there were no distilleries built in Scotland for around 50 years!

Even though it was the failure of the Pattison’s company that started the domino effect leading to the huge crash, I believe the crash was inevitable. When there is a boom, there is going to be a crash! It was just a matter of time. Unfortunately, the Scotch whisky industry is experiencing the largest boom ever. Does this mean that there is another crash just round the corner? Let’s hope not.

It has been 117 years since their imprisonment. Hopefully no other company will befall the same fate as the brothers.

LS