1960s WORK
0190 Gallaher – Leaf
When I arrived at Gallahers it was very old-fashioned firm. It was dominated not by production people but by the leaf buying people. In this respect it was rather like the wine industry. It was a connoisseur's trade -- even though the product was smoked by the average man. Indeed, the company was dominated by the families who had been running it for generations. In particular my boss' boss, John Mason, was universally known as Master John; since he'd been the son of a previous main board director.
Anyway, I had to learn about leaf buying as part of my introduction to the company. It was, even in the modern age, very important to the tobacco industry. Thus I learned all about the different parts of the tobacco plants, which produced different tobaccos; cutter leaves – at the top of the plant, I think - were particularly important in the production of cigarettes. I also had to learn all the areas where tobacco came from. Traditionally they came from America, from Virginia. At the time I was there, though, most of the common stock came from Rhodesia (this was before UDI). On the pipe tobacco side we also bought a range of specialist tobaccos. Latakia - which was cured by woodsmoke until it was black and smelled heavily of the woodsmoke - came from Greece, Perique came from the Louisiana - where it had been buried in the mud for years so that it fermented. In particular, for the most popular pipe tobacco brands, we used a lot of the fire dried tobacco -- from Rhodesia -- which was especially strong.
Thus, it was not just a matter of being able to name the main tobaccos in a blend, you also had to be able to recognise where they came from. Thus, as with wine connoisseurship, you had to be able to take a leaf, look at it and say where it came from and from what part of the plant; and even the year it was grown. This sounds impossible, but it was a skill which we eventually learned. After six months or so I could do this. I amazed one tobacco dealer, in Brumfits, when I took one of their own mixtures and was able to identify - even from the finely shredded tobacco - not merely where it had come from but what the year that was! This, in the old days, was what set you apart as a leader in the tobacco industry.
The tobacco was brought into the UK in vast quantities and was stored in bonded warehouses. In these warehouses it was typically stored in 400 pound bales or boxes. It was only when the tobacco was withdrawn from these warehouses, to go into production, that duty was paid on the raw weight of the tobacco. To a degree, this depended upon the moisture content. Thus you paid a penalty, in effect, for warehousing around the docks, since the moisture content tended to be higher. I couldn't understand, therefore, when the main leaf for Condor was stored in such a warehouse. I was, however, discreetly told that the reason for this was that, when the tobacco was weighed, there were two people separately reporting the weight -- one for Gallahers and one for customs. In this particular warehouse the customs man always rounded down, never averaging. As a result the amount of money saved in this way -- which customs didn't realise was happening -- was worth more than the extra moisture!
Indeed the finances of duty were critical to the company. Every day when the Gallahers courier went to the customs -- with a cheque for a hundred million pounds or so -- he would arrive there just after three o'clock; formally apologising for his lateness. The reason for this was that the banks closed their books at three o'clock and hence the cheque would not be cleared until the following day. This by itself gave Gallahers extra interest of several million pounds a year. Mind you, this was nothing compared with what happened one day while I was the Gallahers. One of our managers was used going out to lunch with a friend of his at the Bank of England. That day the friend telephoned through to say he couldn't make lunch and let slip that they were working out the implications of devaluation! Gallahers was one of the few companies which could do anything about this, since at that the time transfer of sterling was regulated but Gallahers had literally billions which it could move instantly abroad -- since this was required for buying leaf. Gallahers immediately did this, and made £600 million when the pound was devalued! It was never clear to me whether this was an accidental slip, or a favour to a friend.
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