Corby Distilleries Limited

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Corby Distilleries Limited

1002 Sherbrooke Street West
Suite 2300
Montreal, Quebec H3A 3L6
Canada
(514) 288-4181
Fax: (514) 288-6715

Public Company
Founded: 1859 as Corby ville Mills & Distillery
Employees: 170
Sales: US$69.1 million
Stock Exchanges: Toronto
SICs: 2084 Wines, Brandy, and Brandy Spirits; 2085
Distilled and Blended Liquors; 5182 Wine and Distilled
Beverages

Based in Montreal, Corby Distilleries Limited markets a full range of domestically produced distilled spirits and liqueurs as well as imported cognac, scotch, gin, and a variety of wines. Leading brands marketed and distributed by Corby include Lamb’s, Wiser’s, and Canadian Club. The company boasts a legacy of success dating back to the 1870s.

The enterprise that would become Corby Distilleries was started in the mid-1800s by entrepreneur, politician, and English immigrant Henry Corby. Corby, in search of adventure and opportunity, had sailed to the New World in 1832 with his new bride. After arriving in Quebec, the couple sailed up the St. Lawrence River into Lake Ontario. They eventually reached Belleville, a town located at the mouth of the Moira River that had been settled in 1816. The 26-year-old Corby and his wife were impressed by the beauty of the area and chose to remain in the town. Corby invested what little money he had in merchandise for a tiny food shop. He soon added a bakery to the store, which allowed him to put to use skills he had developed as an apprentice baker in London.

Within a few years Corby had established himself as the leading baker in the little town of Belleville. Besides growing his business, Corby and his wife managed to have three children. Corby also joined in the 1837 Rebellion as a volunteer in a rifle company. After a brief stint of service he returned to Belleville and contracted to provide supplies to troops encamped in the village. Tragedy struck shortly thereafter. Two days after Christmas, Corby’s wife and three children were enjoying a sleigh ride on the bay. The sleigh broke through the ice and all four drowned. Corby subsequently married the sister of his first wife, a common practice at the time. She eventually bore 12 children before she died and Corby married a third time. Corby later purchased Massassago Point, where his first family had drowned, and turned it into a public resort as a memorial.

In 1838 Corby sold his bakery and grocery business and purchased the steamer “Queen,” which he captained as a transport between Belleville and nearby Kingston. After four years he left that business and became involved in the buying and selling of grain. In 1857 he started a milling operation in nearby Corbyville. This business was the precursor to Corbyville Mills & Distillery. The mill started out offering a grain cracking service to farmers in the area, who brought in wagon loads of corn which they would take home with them after Corby ground it. In 1859 Corby expanded his operation, making arrangements with farmers wherein they left extra grain which he distilled into whiskey and sold back to them as a sideline business. The liquor sideline grew steadily until, in the 1870s, the mill became secondary to Corby’s distillery operation.

Corby was heavily involved in politics as well as business. He was chosen as mayor of Belleville for a two-year term that began in 1867. He was then elected to the Canadian Provincial Parliament. Meanwhile, the distillery business continued to thrive and Corby’s fine whiskeys became much more widely known. By the late 1870s the aging Corby was prepared to begin turning over the business to his sons. Best suited among them to run the company was Henry Corby Jr., the second-oldest son. Henry Corby died in 1881 and the younger Corby assumed leadership. Henry Corby Jr. (also known as H. Corby) brought a new level of energy and business expertise to the enterprise. Under his able hand the company flourished into a leading regional distillery.

H. Corby built a suite of offices on Main Street in Belleville and a new warehouse. He also was quick to institute the practice of bottling whiskey rather than sell it in barrels. For a number of years large barrels of whiskey were brought into Belleville by horse-drawn cart from Corbyville for bottling. A bottling operation was eventually established in Corbyville. Crates of the bottled whiskey were then transported to the Belleville warehouse, from which they were loaded onto rail cars and shipped throughout Canada. As the rail system expanded across the country during the late 1800s and early 1900s, the Corby name spread throughout the country and became known as a high-quality whiskey. Corby also began importing Scotch whiskey, and for a while the company became involved in the tobacco trade.

Like his father, H. Corby became known as a philanthropist and politician. He, like the senior Henry Corby, was a captain in the volunteer fire department. He also donated large sums of money to the Belleville hospital and the St. Thomas Anglican church. As Belleville grew, Corby was a major donor and leader for a variety of improvement projects. He also served two full terms and part of a third in Parliament. In addition, Corby became an avid traveler and ventured to Egypt, Europe, and many Pacific islands. Company annals relate an incident that occurred in Nice, France, on one of his trips. Corby encountered a small wines and spirits shop. In jest, he asked the owner if he had any of that “good Corby’s whiskey.” The dealer rummaged around and, to Corby’s surprise, found a dusty, 15-year-old bottle of Corby’s whiskey that Corby purchased as a souvenir.

By the early 1900s Corby had amassed a sizable fortune and was ready to retire. His opportunity came one day in 1905 when a tobacco trader named Mortimer Davis called on him. During the course of their conversation Corby expressed his desire to leave the business and devote more of his time to travel. Through the sale of bonds issued for a newly formed corporation call H. Corby Distillery Co., Ltd., Davis managed to buy out Corby and take control of the company in 1907. Corby spent the remainder of his life traveling and relaxing. He died in Honolulu in 1918 at the age of 67 and was survived by his wife and three daughters.

Unfortunately for Davis, the distillery was destroyed by fire shortly after he purchased it. The facility was quickly rebuilt, however, and Davis eventually parlayed his new company into a top Canadian distillery. In fact, Davis had already become a respected name in the regional tobacco industry before he purchased Corby. He would later be remembered as a major influence on the Canadian whiskey business and would even be knighted because of his important industrial contributions to the British Empire. His influence in the liquor industry spread throughout Canada, England, and the United States, partly as a result of war-time contributions. Indeed, during World War I Corby Distillery suspended production of liquor and converted entirely to the manufacture of alcohol, much of which was shipped to the United States to make synthetic rubber and other materials. The company also produced millions of gallons of industrial alcohol for shipment to the United States during World War II.

In 1918 Canadian Industrial Alcohol Company Limited, a holding company, purchased H. Corby Distillery Company Limited. Canadian Industrial made subsequent acquisitions as well and emerged as a major player in the alcoholic beverages and industrial alcohol industries. One of the most important of these purchases was Robert McNish & Company Limited of Glasgow, Scotland, the bottler of the renowned Scotch whiskey Grand McNish. Canadian Industrial also acquired J.M. Douglas & Company Limited, a major import company, and Wiser’s De Luxe Whiskey. For about 30 years Corby operated under the umbrella of its parent, Canadian Industrial. During that period Corby flourished as a leading manufacturer and distributor of Corby whiskeys and other beverages.

By 1950, in fact, the Corby Distillery facilities had ballooned to include over 80 buildings on about 23 acres. The company’s wine storage capacity had grown to include ten rack warehouses, each of which could store 15,000 to 50,000 barrels of whiskey and gin. After the completion of a modern “continuos” still in 1950, Corby boasted a production capacity of over four million gallons of grain and molasses spirits per year—the grain spirits were used to make whiskey and gin, while the molasses distillates were utilized in the manufacture of industrial alcohols. Because of Corby’s growing importance, Canadian Industrial chose to change the name of the holding company in 1950 to H. Corby Distillery Co. Ltd. (the name was changed again in 1968 to Corby Distilleries Ltd.).

Thus, in 1950 Corby became the parent company of a wide range of alcoholic beverage and industrial alcohol operations that distributed products throughout North America, in Europe, and in other regions. In 1951 Corby moved its headquarters into 1201 Sherbrooke Street West, a mansion in Montreal that was built in the 1890s. The structure had originally been built as a home for Montreal banker James Baxter. The residence was purchased to house the executive offices of Thomas Robertson Limited in 1900 and was redesigned by renowned architect Stanford White, who also designed Madison Square Garden in New York. Corby purchased the structure, completely renovated it, and opened its offices there in 1951. The grand opening of the structure was attended by both Canadian and U.S. dignitaries. The building became a government-protected historic property in 1974.

By the mid-1970s the Corby umbrella encompassed a variety of companies and products and managed a wide distribution network located primarily in North America. Top-selling brands included Corby whiskeys, Wiser’s whiskeys, and Lamb’s rums, as well as a number of products imported through the J.M. Douglas subsidiary. During the 1980s Corby expanded steadily through increased sales and the acquisition of other brands. During that period, sales ballooned into the area of US$90 million annually as Corby assumed control of more than 25 percent of the entire Canadian spirits and imported wines market. By the late 1980s Corby was generating more than US$80 million in annual sales, employing a work force of about 570 people, and maintaining the business’s fiscally sound base; the company had managed to achieve steady growth throughout the 1970s and 1980s without accruing any long-term debt.

Corby’s financial performance began to wane in the early 1990s. Revenue declined about 15 percent between 1990 and 1994 (year ended February 28), although profits remained strong. Much of the decline in sales was attributable to ongoing tax increases related to alcoholic beverages in Canada. Indeed, the tax environment had become a problem for the alcoholic beverage industry: the Canadian government was slapping a whopping 83 percent duty on domestic spirits. As a result, the consumption of alcoholic beverages began to gradually decline. Worse yet, a sophisticated smuggling network had developed to bring alcohol into Canada from the United States. Going into the mid-1990s it was estimated that one of every four bottles of liquor consumed in Canada was smuggled into the country illegally on the black market.

Corby managed to sustain healthy profits during the industry downturn of the early and mid-1990s by slashing costs, restructuring, and adjusting its product mix. The company eliminated much of its work force, sold off its executive offices, closed several of its less productive manufacturing facilities, and even began entertaining offers for its Corbyville plant. The latter move represented Corby’s transition from manufacturing to marketing and distribution. In addition, the company added a number of new brands and products to its portfolio, strengthening its market diversity. It added the Canadian Club, Ballantine’s, and Kahlua brands in the early 1990s, for example, and began marketing lines of ready-to-drink cocktails. The net result of Corby’s overall effort was an increase in net earnings, despite lower sales and a decline in the company’s total assets.

Corby Distilleries entered the mid-1990s with control of about 27 percent of the Canadian spirits and imported wines market. Corby marketed nine of the 25 leading brands of spirits sold in Canada and enjoyed a leading position in major categories like whiskey, rum, gin, Scotch whiskey, vodka, cognac, liqueurs, brandy, and tequila. Popular brands marketed and distributed by Corby in 1995 included Canadian Club, Wiser’s, Lamb’s, Kahlua, Beefeater, Salvador’s, Hennessy, and Courvoisier, among others. The company’s 1995 annual report cited government regulations and taxation as a major determinant of the company’s long-term success.