The History of Bruichladdich Distillery

William Harvey and Bruichladdich

We have come across an illuminating account by Rudd Harvey of the early years of Bruichladdich, hand-written shortly before his death.  Rudd was a son of William Harvey (IV), the man credited with founding and running the distillery.

It makes intriguing reading, and explains in some detail how the distillery was set up and financed, and how it so nearly disappeared several times during it’s charmed life.

The Harveys were a dynastic whisky family, owning Glasgow’s Yoker and Dundas Hill distilleries. William Harvey (III) died in 1862 at the age of forty when his three sons William(IV), John and Robert were only fifteen, fourteen and five respectively. The boys’ inherited distilling interests were looked after by their uncles Barnett and John (Snr).

William started his working life as a clerk in the Glasgow sugar trade, where he progressed to become a successful broker. John joined the family distilling business with his uncles, while Robert, the youngest, eventually took a degree in engineering and set up his own distillery design company.

Then in 1881 the three young brothers had a bright idea - why not combine their expertise and inheritance to build a third Harvey distillery?  Robert would build it, John would run it and William would provide the business acumen.   The plan was that, working  together, managing one distillery each, they could market their own whisky brand as a self-contained whisky business. Perfect!  What could possibly go wrong?

The idea had two catalysts. First, the Spirit Act came in to force in 1880 shifting the duty payable from malted barley to the finished product - whisky.  It also created bonded warehouses which permitted the deferral of tax until the whisky was sold. Second, the invention of the steam ‘puffer’, a flat-bottomed commodity-moving vessel that allowed coal and extra barley to be brought to Islay, transforming the economics of island distilling.

The naive young men had a vision.  They believed that the combination of three distilleries run by the family, Yoker, Dundas Hill and the soon-to-be Bruichladdich - would provide the ideal mix for the Harvey's to dominate the Scotch whisky business.  So, showing considerable entrepreneurial flair and bolstered by youthful enthusiasm, the three brothers embarked on building Bruichladdich in 1881.

Originally destined for the opposite side of the Rhinns where a more regular water supply was present from Loch Gorm, it was finally (and sensibly)   decided to build on the western shore of Loch Indaal which provided a more sheltered anchorage.

The Harveys decided to use revolutionary new building methods (cavity wall construction) and materials (concrete) - reinforced with pebbles from the foreshore in front of the distillery.  Building contractor John MacDonald of Tollcross in Glasgow erected a 'solid and handsome structure' formed in a square around a courtyard, while Bennet and McLaren, also of Glasgow, undertook the coppersmith work.

Robert's simple yet avant-garde design was inspired. Built to an exceptionally high standard, it incorporated several nifty new ideas, and was specifically designed to produce the purest spirit possible from tall, elegant stills.

This was Islay’s first dedicated full-scale, purpose-built distillery. Uber-modernist in its day, the testament to the design is that little has changed since.  The steam power has given way to electricity, the kiln was dismantled and the floor maltings stopped at some point after 1945, but apart from that, it is all still there, still producing the purest spirit in Scotland, (according to Pip Hills, the founder of the Scotch Malt Whisky Society).

Rudd’s account is a frank narrative, with the air of a death-bed confession, describing the trials and tribulations of William Harvey and Bruichladdich between 1881 and 1936.

This is Rudd’s note in its entirety:

 

The distillery was built in 1881 by my uncle Bob who was a practical distiller, as well as an Engineer (BSc).  It was considered an exceptionally convenient distillery.  It was built on a hill so as to take full advantage of gravitation, the brewing tanks being highest up, mash tuns (2) cooker (3) refrigerator (3) and underback, finally tun room.

 

By this arrangement the only pumpings required were from tuns (the fermenting vessels) to the wash charger in the still house and pumping the sparges from underback back to brewing tanks. Also done by same big engine, copper plunger pumps (fort? proof) as belts off main shaft from engine room to mash house stores.

 

The draff house was immediately under the mash tun and was emptied from 2 long plugs in the mash tuns.

 

There was a small steam engine in the tun room for use in keeping the froth down by switches. The switcher in the wash still was worked by water power from main water supplier from the big dam which was about half a mile up the hill above the distillery. The pressure from the water being sufficient to fill the boiler against a 40lb steam pressure (as a fire hose it could throw the water to the top of the chimney stack (90 ft).

 

All parts of the distillery were rated in correct proportion to each other.  This also applied to the malting floors, kiln (the kiln itself was a patent 3 door to regulate shaft in kiln floor) malt deposit, one big engine working all the machines, mill, mash tun, stills, plunger pumps.

 

No leather belts being required expect for mill which was connected to the large fly wheel.  This engine was so silent, even when standing at the door of the engine room you could not say whether it was on or not (it was then 40 years old).

 

My uncle made a device on the wash still to ensure that should a mistake be made, and a vacuum be caused by not letting air into the still before recharging with cold worts and discharging of pot ale. This was a simple device being a double ended key which could not be taken off the air valve without opening it to let the air in, then the other end being used to open the valve for letting away the pot ale. A still could collapse if this was not done. He did not patent this but now practically every still in Scotland has this device on the still.

 

Another device he had arranged was the main sewer from down the centre of the yard, under the flues (floors?) from boiler and stills, with a  trap door to let  away lost steam for cleaning flues.

 

Now we come to the great mistake that was made due to over confidence in Relations. The principal shareholder my uncle Albert, uncle Bob and my father as directors, there were also various [12] small shareholders, it was arranged verbally only with Messrs John & Robert Harvey Ltd, Dundas Hill, Glasgow [confusingly, not the brothers of William, but family predecessors, a company their father also had a share in] and William Harvey Ltd. of Yoker Distillery [the company owned by the deceased father of the three brothers, also called William] that after Bruichladdich was built the three distillers would work together and have a blend and bottling business which would have worked perfectly on this understanding (without any written agreement being made legally) Bruichladdich was built.

 

However, before it was complete, the parties fell out and the combine was off!  Each distillery working on his own –  (to great disadvantage).

 

The result was that Bruichladdich, being an Islay malt only about 10% being required in blending with grains, so we could only sell to blenders and the big whisky people like Johnnie Walker, Dewars, Ross & Culter, Grants etc.

 

The Distillers Company fixed the price for all Islay new makes, we could not get more – nor could we bottle malt whisky ourselves (as we once tried) and was at once told we would not get any more orders if we continued so,  the only time was in boom years or after a war, when whisky distilling was restricted  – from 1881 until 1907 only two dividends were paid.

 

In 1907 the distillery was completely stopped, by 1912 things were looking pretty grim, with large stock of unsold whisky and a big overdraft at the Bank. Banks would not advance anything on the buildings and plant.

 

After being stopped all these years uncle Albert was afraid the £3 call would be made to shareholders and he wanted my father to insure his life to meet this – which my father refused to do so he (uncle Albert) thus gave up his share as he thought the company would go bankrupt in which case he would have to pay the £3 per share himself.

 

In 1913 an offer was made for the unsold whisky by a firm (Macintyre & Train) not a good one but sufficient to pay off the Bank overdraft, and something to spare.  My father who had by now given up his town house and was living in Islay, went up to Glasgow to see a friend of his who was in the whisky business, a Mr. Robertson of Robertson & Baxter.  He advised him to accept the offer, and not until some months after, when the Bank was paid off, did he discover it was Mr. Robertson who had bought the whisky [at half price] under another name!

 

When the war was declared in 1914 [young] whisky prices started to move up [as a result of the 3 year age limit law]. From 1914 to 1919 although we could have sold whisky and restarted, we were not allowed to under the quota system, as we had no quota for the previous 5 years to go on [the distillery being closed].

 

In 1919 I received a telegram cable to say ‘come home 1st steamer, distillery working!’ I was in Chile so gave up my employment and came home. When I got home I found the distillery was not working and there were weeds 2 feet high in the yard. The reason my father wanted me to be sure to come, was he saw prospects of more good years to make up deficit in general whisky stocks (due to shortage after the war). I should mention that the shares were made up of 2000 shares at £9 with a £3 call unpaid.

 

We started the distillery again in October 1919 and worked steady until 1925 – the season 1924/25 being exceptionally good. We could have done better if there had been more money to buy barley, coal etc.  By this time the overdraft of £5,000 was paid off also the £3 call written off.  Still enough money to get in barley for a big make for 1925/26. Slump started again in 1926, no sales, all the money in unsold whisky. Distillery stopped 1929 to 1935 owing the Bank £1935.

 

£2000 new whisky bought (in)1926 was exchanged in 1934 [for John’s 600 Bruichladdich shares @£5] for £3000 sold (to) my father, he getting this whisky in exchange.

 

This left me with the say, along with my father (I may say my sister Helen thought I was an ass to do this – to take the risk). After the fire in 1934, the family wanted the distillery dismantled and the insurance money divided and what the pot  would fetch.

 

The distillery was restarted in 1935 after rebuilding spirit store and office but not the big house, my father going into a house we had in the village.  The idea was to try and sell the distillery as a going concern.  This had been tried before without success.  It was again advertised in whisky papers and I went round with the Big Whisky people with an agent, but without any success.

 

In 1936 [William Harvey dies] Mr. Hobbs turned up. He was a speculator and was financed by a William Price (Burke?).  He bought the distillery for £8000 (only).

 

Here the account ends, the writing having become increasingly spidery and weak, Rudd died shortly afterwards.

 

"The Great Mistake"

There was £18,000 share capital issued in the Bruichladdich Distillery Co. Ltd via 2000 shares, £9 paid up with a £3 call. The principal shareholders were the three brothers (William 25%, Robert 20%, John 10%) and their uncles Barnett (16%) and John Snr (15%).  The brothers’ sister Mary, William’s recently married wife Ellen and some 12 smaller shareholders made up the remainder 14%.  Revealingly, as it transpired, the directors were William and Robert.

But disastrously, there was “the great mistake”. As Rudd says: “Before it was complete, the parties fell out and the combine was off.”  So what happened? Was it William’s money, enabling them to arrogantly ignore the advice of professionals in the whisky business? There was no legally binding agreement between the parties, they must have assumed that blood was thicker than water. Perhaps William, as son and heir, naively thought that the two existing, long standing family distillery companies could be easily amalgamated with a new third enterprise.

Clearly William and Robert had a terminal disagreement with their brother John and their uncle Barnett about bringing the three distilleries together. Was it a clash of personalities? Was it the business plan? Was it over Uncle Barnett’s intransigent dead body? Facing their  first crisis, the brothers set out in a rowing boat on Lochindaal for a private meeting, arguing about their future direction. The result was that Bruichladdich parted company from John, his uncle Barnett and Yoker and Dundas Hill distilleries.

Now they had a real problem. Robert and William - neither of them a distiller - were on their own, the business plan totally broken. Robert was the original distillery manager,  after all it was his design, but within two years William had learnt to be a master distiller and seems to have usurped his younger brother. Consequently, the company was reconstructed as The Bruichladdich Distillery Co. (Islay) Ltd in 1886, the same year that Alfred Barnard observed: “Bruichladdich is quite an aspiring and tastefully built village, and is planted on one of the finest and most healthy spots in Islay.”

The Distillers Company Limited (Diageo’s predecessor) controlled the prices and the market for Islay whisky, and William Harvey, isolated, was unable to obtain the price they needed to make money. They even tried to bottle their own whisky but were threatened with being black-balled if they continued. Consequently, in the first 25 years the company was able to pay just two dividends. The business, not for the last time, was in serious trouble.

So what happened to Robert? William had been a successful sugar broker and must have been personally quite wealthy for he was in a position to lend Robert £1209 in 1891 when he went to Australia, possibly on a business venture (his family remained back in Glasgow). But Robert died there just six months later in 1892. William sued his estate for the outstanding sum and was awarded Robert’s 415 Bruichladdich £9 shares (nos. 86 to 500) valued then at only £2 - reflecting the dire position the business was in already.

By 1893 he controlled 51% of the shares. William was already in control of the company via his own shares, plus those of his wife and 12 smaller family shareholders.  From jottings in his note book, it clearly indicates that there was a struggle for control of Bruichladdich with William lined up against his uncle Barnet Harvey, his brother John Gourlay Harvey and JH (John Harvey, another uncle, who controlled Yoker) who controlled 43% between them.

In 1916 with the distillery idle and unable to operate  due to a government wartime restriction, William wrote to all the small shareholders offering to take over their existing shares enabling them to avoid the £3 call obligation of the virtually bankrupt business.

William Harvey died at the age of 87 on 19th December 1936 and is buried at Kilchoman  graveyard.  His youngest son, Kenneth, invalided from WW1 with shell-shock, took over as manager of the distillery at the age of 40 - William’s eldest two sons had never worked for Bruichladdich, an indictment of the profitability of the company, both pursuing careers in the navy.

 

Joe Hobbs.

The colourful entrepreneur Joe Hobbs was born in Hampshire in 1891 and emigrated with his parents to Canada in 1900. From ranching in Calgary, he became a naval flyer during the First World War and then went on to make a fortune in shipping, property, wines and spirits.  However he was ruined during the Great Depression of 1929 after which he came to Scotland and began to acquire assets in the run-down Scotch whisky industry.

Hobbs, it is said, befriended the Harvey family and persuaded them to sell Bruichladdich to him and his financial backers for just £8,000. Hobbs immediately sold it for £23,000 to Associated Scottish Distillers (ASD), a company in which he had an interest.  Before long Hobbs owned several distilleries, buying Glenury in 1936, Bruichladdich and Glenkinchie 1937, and Glenesk/Hillside in 1938.

Bruichladdich was refurbished under Harvey Mutch and production resumed in 1938 however the outbreak of war in 1939 meant there was no distilling between 1940 and 1945. Consequently, Hobbs sold his interest in ASD for £38,000 to Train & MacIntyre, a subsidiary of National Distillers of America, with an option to buy stocks of whisky valued at £250,000.

 

The Post War Years

In 1952 Ross and Coulter Ltd (Glasgow whisky brokers) purchased Bruichladdich from Train & Coulter.  A year later in 1953 Train & McIntyre was acquired by DCL, the forerunner of Diageo.  Then in 1960, following the freeing of Scotch whisky exports from post-war rationing,  the distillery was purchased by AB Grant. The new owners expanded output with the cessation of on-site malting, which nearly doubled capacity from the original design volume.

It was to change hands again in 1968 with a purchase by Invergordon Distillers. The original spirit still was replaced in 1971, and Ian Allan took over as manager a year later. Capacity was again increased in 1975, by heightening the mash house and tun room, and adding a twin set of wash and spirit stills, bringing the annual capacity to a maximum of 1.5 mlpa.

In 1988 Invergordon successfully negotiated a management buy-out from their parent company, the Hawker Siddeley Aviation conglomerate, who had owned 75% since their 1978 takeover of Carlton Industries. The new Invergordon company floated in 1990 on the London Stock Exchange.

At the same time (1990) Brent Walker were in the process of completing the sale of Whyte & Mackay to American Brands (Jim Beam Brands) and, following a hostile takeover bid that lasted two years, Whyte and Mackay succeeded in taking control of Invergordon in October 1993. Two months later, Bruichladdich was closed down as “surplus to requirements”.

Mothballed and facing extinction, there was to be another close escape for Bruichladdich.  Jim Beam Brands were to sell Whyte & Mackay in 2001, in a daring management buy out, to Kyndal, which ended up being rescued by Vivian Immerman before being resold to United Breweries of India in 2007.

Fortunately, just before the ill-fated Whyte & Mackay buy-out, Bruichladdich was bought by a group of private investors led by wine merchant Mark Reynier for £6.5m. This was the first distillery to be sold outwith the whisky industry. Working to a dramatic deadline, Reynier closed the deal on 19th December 2000.  Jim McEwan became director of production, and after spending five months restoring the Victorian machinery and buildings that had been built by the Harvey brothers in 1881, distilling restarted at 8.26 am on  29th May the following year.

 

Renaissance

A prolific series of new, small-scale bottlings followed as  the fledgling company survived on a hand-to-mouth basis while waiting for its own spirit to mature.

Adopting a wine-trade philosophy of provenance, traceability, terroir and authenticity, the company pioneered a range of new Bruichladdich spirit of unparalleled diversity, while Islay-bottling a wide range of  limited edition, natural bottlings from the existing stocks.

Peated versions of Bruichladdich, the spirits known as Port Charlotte and Octomore - the world’s most heavily peated whisky  - followed in 2001 and 2002 respectively.

Innovations such as X4, Bere barley and the Botanist Gin followed as the company evolved. Dramatic packaging reinforced the progressive attitude of the company’s management, as well as a series of provocative cuvées that challenged the perceived, industry-held, way of doing things. In September 2011, the company came of age with its first own 10 year old, The Laddie Ten.

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