Published on June 5, 2019 | by Alastair Gilmour0
Sunderland’s lost brewery
It’s twenty years since one of the great tragedies of North East brewing occurred. Alastair Gilmour reports
The final throes of Vaux Brewery were full of complex management structures, financial intrigue, indecision, and dare we say it, duplicity. It’s 20 years since this North East icon was sent down the drain when the region not only lost a hugely committed workforce and 160 years of brewing came to an end but when Sunderland lost its heart – both emotionally and physically.
Two decades ago, Vaux Brewery staff made their final visit to work to collect their redundancy cheques. The company had been linked with the Nicholson family for five generations and on that final day, managing director Frank Nicholson summed up its closure as “a civic tragedy because we are the heart of the city”. “It’s a human tragedy, the scale of which people will not be able to see for years to come,” he said.
There were 430 workers at the Sunderland site with another 150 employed by the group at Wards of Sheffield which also closed. Shortly after, Hartlepool-based Pubmaster signed a deal to take 659 Vaux pubs into its portfolio.
On that final day, grown men and women had tears in their eyes as they said a final farewell. Most of them had worked there for decades; people such as Pauline Phillips who had 22 years service, John Doyle (19 years), David Armstrong (26 years), Ian Atkinson (26 years), Tom Greenlay (46 years), Keith McKnight (31 years), Jack Howe (30 years), and Stan Harrison (34 years).
But even those with short service were devastated. Pat Stephenon had only worked for the brewery for two years but put on a brave face when speaking to a reporter from the Newcastle Journal.
“It’s probably the last time a lot of people will see each other,” she said. “It is terrible for the town. I never found such a friendly atmosphere as there was in Vaux.”
The brewer had celebrated its 150th anniversary in 1985 with two breweries, 5,024 staff and 750 licenced premises. By 1997, the company comprised of Vaux Breweries Limited, Wards Brewery and 34 Swallow Hotels – a shining example of North East business acumen.
But then the wheels fell off. Vaux fell prey to City investors – some might call them asset strippers – who can smell blood 300 miles off. A new chief executive was appointed, indoctrinated by the twin mantras of “management focus” and “shareholder value” and the belief that these could only be delivered by getting rid of the brewery and concentrating on hotels and pubs. This led to opportunism and a new company board, and created the wounds that the merchant bankers got wind of.
Frank Nicholson, who was managing director at the time, says: “The Vaux story had been an inspiring one, but then quite suddenly it was all over because the company lost its head. The madness originated in the fear of takeover that had haunted us for years, so an opportunistic approach from a hotel company in June 1998 immediately put the fear of God into us and everyone else.
“I protested in vain that the brewery was the heart of Vaux and a company without a heart cannot survive. So, off I set in pursuit of a management buyout to prove that the board’s decision, with which I so strongly disagreed, was wrong. Wrong commercially because we were profitable and wrong philosophically because a huge community of employees, customers, suppliers and citizens of our home city depended upon us.
“One of the board’s banking advisers started doubting the financial standing and business motives of the venture capitalists who were funding our buyout. The trouble is when poison drips it eventually corrodes and that is what it did to the nerves of our board members.
“Fearing criticism from faceless City institutions, they decided to revisit their earlier decision to accept our offer and, for reasons which even I – emotionally close to it as I was, but not a fool commercially – failed to understand. The board, men of straw all, reversed it and rejected our bid – the consequences of which was the closure of two modern and efficient manufacturing plants, the redundancy of more than 600 people, the devastation of local suppliers, the disappearance of famous and popular brands like Samson and Ward’s Bitter, and the end of support for numerous local initiatives, charities and communities.”
But not all is lost. The independent Houghton-le-Spring based Maxim Brewery produces former Vaux beers Double Maxim, Samson and Lambton’s along with Wards Best Bitter and a host of original creations.
Maxim managing director Mark Anderson (one of the Vaux “casualties”) says: “Maxim Brewery is incredibly proud to still be producing famous Vaux beers along with our own distinctive and innovative creations. The history of our brewery business is intimately aligned with that of Vaux and all that it stood for.
“It’s our history and we kept the links through procuring the old Vaux brands like Double Maxim and keeping them going. It’s a sad story but now a good one in that we’re still going. We did it for heritage reasons.”
To mark the 20-year occasion, Maxim is producing a special Gold Tankard Mystery Ale inspired by the story of three solid gold tankards belonging to Vaux that were still on site when most workers left in 1999. Gold Tankard was a core Vaux beer.
“Where are they?” asks Mark Anderson. “We recently had a call from a lady whose husband is a former engraver who remembers sending the gold tankards to some investors in London. It was investors who closed Vaux and effectively the tankards are the property of Vaux Breweries Ltd. They were probably sipping champagne out of them in the City of London.”
The determination in his voice suggests that he’s ready to follow that one up – brewing history never stops being written.
Frank Nicholson’s pride in Vaux and its Sunderland roots remain undimmed, despite his enormous regret which is equally close to the surface.
He says: “In less than 160 days a company with more than 160 years of history had committed commercial suicide and the company’s directors paid the price of worshipping only at the altar of shareholder value, forgetting that such an altar requires to be built on much broader foundations, ones that embrace all the stakeholders – employees, customers and suppliers, as well as shareholders.
“The last line of the editorial in the Sunderland Echo on the evening of the closure said it all: ‘Goodbye, old friend’.”