Cigarette Card Information
Tobacco Wars
1900-1902 is a period of tobacco history called 'The tobacco wars'. Really it was James B. Duke v The Rest of the World. The end of 1901 saw the birth of the Imperial Tobacco Company (ITC). Formed by Wills and twelve other companies they prepared to do battle. During this period many smaller tobacco companies were carried from the field of play because cigarettes were being sold at less than cost. The battle was that bitter and that important. Just imagine the tobacco running in the gutters.
Unusually the UK manufacturers saw "Buck" as something of a threat, and this is the unusual part, did something about it, very quickly. September 19 1901 saw thirteen of the largest firms meeting at the Queens Hotel, Birmingham. The result of the meeting was the creation of the ITC on December 10, 1901.
The original 13, with there capital commitments brought into the consortium,
- WD & HO Wills £7,000,000
- Lambert & Butler £751,000
- John Player £601,456
- Edwards, Ringer & Bigg £372,603
- Hignett Bros & Co Ltd £477,038
- Hignett's Tobacco Co Ltd £54,183
- William Clarke & Son Ltd £403,582
- Richmond Cavendish Co Ltd £319,805
- Stephen Mitchell & Son £701,000
- D & J Macdonald £131,973
- F & J Smith £525,803
- Adkin & Sons £146,499
- Franklyn Davey of Bristol £473,555
Something of a who was who of the tobacco world. The capital commitments made give a rough idea of the amount of capital these manufacturers were devoted to the production of cigarette cards. Wills was obviously the dominant force in the UK market with the incredibly successful brand, Wills, Wild Woodbine. It is interesting to see Players put in somewhat less money than Lambert & Butler & Stephen Mitchell although the card output from Players was at least on a par with Wills.
Compare the sort of money the British firms could put together with that of the American counterparts.
The following year five more firms were to join,
- WA & AC Churchman
- WT Davies & Sons
- W.Williams & Co
- W&F Faulkner Ltd
- Mardon, Son & Hall of Bristol
The fifth in the list was the printers which did a great deal of the printing for cigarette cards
The stage was set for the tobacco war. Duke fired the first salvo, offering free gifts, selling at a loss and generally attempting to grab market share. Prices for the brands under his control in the British market were slashed by the region of 50% in some cases. Newspaper advertisements almost reached saturation level in an attempt to woe the British public. ITC (who had decided to retain the individual companies identities within the group) retaliated with a bonus scheme for all its trade customers. This meant they were in for a share of the profits. This is also the period that the cigarette card became important as business strategy and a boom time for collectors of cards.
Duke hit back hard. Traders which signed the Ogdens bonus agreement would be given a share of the entire net profits for 4 years plus £200,000 annually over the same period. He was able to support this kind of 'generosity' because of his recent acquisitions of Murai Bros. & Co, Japan, The American Cigarette Co. Shanghai, The American Tobacco Co of New South Wales and the American Tobacco Co of Victoria.
Financially this was going to be hard to beat so ITC played the nationalistic card with an extensive 'Buy British' campaign. Then the master stroke, 1902, saw a deputation from the ITC going to America in an effort to buy a US tobacco firm. James B Duke had bitten off more than he could chew, facing heavy losses in the UK market he could ill afford competition in his home market. On the 26 September 1902 the ATC agreed to sell Ogdens back to the British (Duke obviously wasn't in to bad a bargaining condition, he sold Ogdens back for $15,000,000.) ITC and ATC was to cease all trading activities in the UK.
Interestingly cigarette cards were a major part of the factions weaponry. Inevitably costs rose for both camps and a truce was called. Once the smoke had settled, the ground was divided. The American Tobacco company could have America and Cuba and the British-American Tobacco Company (B.A.T) could have the rest.
B.A.T was a newly formed company which had come directly out the negotiations. It was a partnership between ATC & ITC. Both Wills & Duke were on the board, followed by three of the Ogden family, C.E Lambert and WG Player. What would you give to have been a fly on the wall at board meetings there.
