Whisky and War in Western Australia

Despite the negative news surrounding whisky and its quality, the demise of the whisky drinker in Western Australia was instead a culmination of tariffs and supply. This was mostly a result of the outbreak of the two world wars that would see whisky stocks diverted to the production of ammunition. Although Australian producers would take advantage of this shortfall, drinkers were attracted to the cheaper prices of beer and wine.

Tariffs

In the early 1900’s, it was hoped that a visit by the Federal Tariff Commission would see Western Australia begin to produce its own whisky. During the visit, the Inspector of Excise and Distilleries in Western Australia explained that “licences were provided under certain conditions, allowing vendors to distil spirits for the purpose of fortifying wines”. Evidence was provided that showed Western Australia produced 37,801 bushels of Barley, which was enough for a small distillery (1).

Considering that the raw material for the manufacture of first-class wines and spirits could be raised in almost unlimited quantities in Western Australia, the Inspector could only guess that the reason no distillery had been set-up in WA was because of a “lack of raw materials, or that the men arriving here belonged to the mining class, rather than agricultural”.

The visit was concluded with the final remarks from the Governor Director of Agriculture providing evidence that “the value of the bottled whisky imported was given at £51,373 and that in bulk at £33,850. None of this was credited as having been made in the Commonwealth” (2). He suggested that if the excise duty was lowered by 1s. per gallon, it would give an impetus to the production of whisky in Western Australia.

These comments were confirmed by the Prime Minister at the time, Mr Deakin, when he released the report by The Tariff Commission in 1906. It found that Australian distillers were at a great disadvantage in their competition with imported spirits (3). This was down to many factors, including higher labour costs, a local prejudice against Australian products, the cost of both materials and a smaller output, as well as the allowances provided to companies by foreign governments that lowered the costs of exports. They also argued that one of the main causes of a stoppage of Victorian whisky distilling was the “increase in the excise duties and a consequent reduced protection”.

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So why was this gaining so much media attention? One argument that was presented pointed out that breweries and distilleries were important for the primary producers. Later in 1928, evidence was shown that of the State’s production of 5,615,201 gallons of beer and stout in 1928, “the brewer required 28,015 cwt. of sugar, 173,028 bushels of malt, and 191,829 lb. of hops” in their manufacture (4). “These figures force one to realise that the breweries are a friend of the farmer, and there is a deal of sound advice behind the advertisement for the Australian made whisky”.

The seeds had been sowed, and Australian made whisky would grow in popularity. This was not driven by the consumers change of pallet and a preference for the locally made produce, but in the search for a cheaper whisky. Or any whisky for that matter.

War rationing

Following the breakout of war, London had diverted the entire output of the English distilleries by 1917 (5). Whisky consumption was cut by one-half, both for temperance reasons and for the economy’s sake.

Scottish distilleries were under British government control for the production of spirits used in high explosives and for the manufacture of yeast. Barley, instead of being used for whiskey, was primarily being used for bread (6). As a result, whisky retained for consumption dropped quickly.

In 1916, there was nearly 29 million gallons available to the public, which reduced to nearly 19 million gallons in 1917, and by 1918, it was just over 10 million gallons (7).

As the Commonwealth would now have to rely on the whisky reserves, the Liquor Control Board decided to prohibit the sale of whisky, brandy, rum, and gin that hadn’t been reduced in strength to 30 degrees underproof (8). It was estimated that these reserves would last for five and a half years (6).

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In Australia, similar efforts were being made to limit consumption. Taxes were applied to the manufacture of whisky for use as a beverage as part of the War Tax Bill (9), at no surprise to the merchants and publicans of Perth (10).

There was also the introduction of the War Precautions Regulations, which was aimed at preventing soldiers from accessing too much liquor. Tweet

The licensee of the Peninsula Hotel in Maylands was charged and fined 5 pounds for failing to comply with an order to close her premises for the sale of intoxicating liquor during prohibited hours (11).

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Following the war, the Licensing Commission decided to follow Great Britain’s decision to retain the lower standards of whisky, being 35 per cent under proof for whisky (12). The argument was that, “the lighter the whisky can be made the better it should be for the community”.

It went further, as it led to a mandatory state-wide pole, “on the question of a ‘wet’ or ‘dry’ state”. Specifically, whether it should be, “permissible to reduce whisky, brandy, and rum to 25 per cent under-proof” (13). This was primarily driven by the fact that Western Australians continued to consume the highest volume annually of whisky per head of population at 0.56 gallons. The next best was NSW at 0.43 gallons per head. Again I ask, where has all the whisky drinkers gone?

“Wine is replacing whisky as a popular beverage, according to a huge British firm. The increased demand for wine was about 16,000,000 gallons in England last year, whereas that for whisky has declined from 26,000,000 to 12,000,000 gallons a year since 1916.” (14)

This change in drinking habits was considered a benefit to the public even within the federal parliament. Following another increase in the duty paid for imported whisky, many were arguing that Australian whisky distilleries were suffering as a result. Whisky consumption was dropping as the prices increased, which wasn’t helped by decreases in duties for beer (15).

“In 1913 the Customs duty was 14 per gallon. This had been increased during the war to 17/ per gallon, then to 20/, then to 25/, then to 27/ and finally to 30/ per gallon. The experience had been that when the duty was low the imports were high. In 1913 the imports had been 2,251,000 gallons and in 1925 only 1,200,000 gallons” (16).

This argument didn’t win over the federal government. The Commonwealth needed revenue they said, and they argued that “spirits and narcotics were the first items that should be taxed for that purpose”. According to the government, they “had received no mandate to create a taste for Australian whisky” and that it might, “drive the people to the consumption of light wines and beers, which would be a good thing”.

Not content with this, a member of the Licenced Victuallers’ Association (the body representing hotel keepers) suggested that the high import and excise duties “had virtually weaned the public from whisky” and was unfairly punishing over 1000 hotel-keepers in Australia (17). They argued that the “government would derive more revenue by a reduced duty, with increased sales”.

Or perhaps the decline was due to other reasons. “I notice in my place that there is not near as much whisky drunk as there was a year or so ago. People who drink make it beer. It is not because they cannot afford whisky or wine, but because they are afraid strong alcoholic drinks will spoil them as athletes.” (18)

Australian Production

Such were the increases in taxes that newspapers were reporting on the “outstanding” rise in the import duties for brandy, gin, and whisky (15). The difference now however, was that the excise duties that Australian whiskies were paying weren’t changing. This was making them more competitive in a shrinking market.

“Australian distilling is on a very fine footing, and before many years have passed, the home consumption of Australian whisky and gin should equal the present proportions of rum and brandy”. (19)

Australian produced spirits were growing in popularity. In 1926, the volume of whisky brought in from the Eastern states had increased to 14,019 gallons, up from 8,329 the previous year (20). Whilst whisky imported from overseas decreased by 3,684 gallons.

Some were quick to take advantage of this. A change of policy by L. Doyle Ltd. saw them become the sole agents in WA for whisky produced by the Australian company known as Federal Distilleries Pty. They stated that the demand for their products “warrant their change of policy” (21). However, this didn’t last long.

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“Representatives of the liquor trade in Perth are inclined to think…that a great deal of the falling off is due to the prevailing depression.” (22)

The latest round of tariff increases in 1930 couldn’t have come at a worse time. In anticipation of the increased retail costs, the public were stocking up. This meant that hotels were experiencing a significant drop in sales the following year as the great depression was biting, with some of the largest in the city reporting nearly a 75 percent decrease in consumption of all drinks over the bar (23).

To give some perspective, the total clearance of whisky through Perth’s customs house was 70,341 gallons during 1929 at the start of the great depression. In 1930, this had decreased to 56,658 gallons, and by 1931 it had dropped by over 50% to 28,083 gallons (24).

Across Australia, the value of whisky imported had dropped from 302,527 pounds in 1931 to 86,604 pounds in 1932 (25). Considering the trade balance had turned around and was now 15.5 million pounds in surplus, could whisky drinkers find some price relief for once?

“If wages came down to the Victorian level and if the landlords of hotels would reduce in goings and rents, it would be possible to reduce prices still further to the general public, but in present circumstances the hotelkeepers were united because they claimed that they could not afford to cut prices further.” (26)

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Well, yes. Eventually. An interesting battle in Western Australia between the hotel keepers association and whisky wholesalers occurred in 1933. The federal budget for that year included a reduction in excise and customs duties for beer and spirits. However, the United Licensed Victuallers’ Association that represented hotelkeepers decided that only cased and bottled whisky would be reduced, and kept the price for over the counter sales (27).

This greatly displeased the wholesalers, arguing “the Federal Government reduced duties on whisky and spirits for the benefit of the public, not for the benefit of publicans” and that they “are standing in the way of a revival in the trade of imported whisky and other spirit” (26). The Wine and Spirit Merchants’ Association eventually wrote officially to the United Licensed Victuallers’ Association threatening that they would “take action” if prices weren’t dropped.

Not to be undone, the hotelkeepers responded that they would rather refuse to stock imported whisky than be dictated to by wholesalers. Eventually a compromise was reached, with merchants claiming it would increase the consumption of whisky, whereas the hotelkeepers claiming they were “quite confident that it would result in nothing” (28).

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The next change to the duty paid on luxury items was up. Savvy retailers again rushed to purchase whisky before prices increased, which resulted in a whisky shortage across Perth. The issue was not a short supply, but that merchants couldn’t get the whisky through customs.

A Customs control was suddenly announced to prevent bonded stocks going out at the rate that was considered normal. However, merchants had been taking orders that were now not able to be fulfilled. “There is no shortage, of supplies, as the official showed about 180 hogsheads of whisky under bond in his cellars; each hogs head held approximately 65 gallons of proof spirit” (29).

Newspapers were reporting that despite storehouses of wholesale whisky being sufficiently stocked for many months of sales, hotels could run out of stock within a week (30).

Second World War

“LONDON, Oct. 14 – Mr. Purbrlck (Conservative) asked in the House of Commons today why, as Australia could make all the whisky she required, valuable cargo space should be used for sending out Scottish whisky.” (31)

Whisky was one of the first non-essential goods that received import prohibitions once the second world war broke out. It was also was included in the list of non-essential production items within Australia (32).

With difficulty in obtaining whisky, the rise of black-market produce began to take hold throughout the country. There was a rise in illegal stills being found by police in the liquor branch and by customs, with one capable of producing “four gallons of overproof spirit at each run” and another with “40 gallons of fermenting barley almost ready for distillation” (33, 34).

Such was the short supply that it was also nearly impossible to get a bottle of whisky for medicinal purposes within Perth “however genuine a case is presented” (35). Tweet

Even after restrictions had been lifted in 1945, there was still unsatisfactory supply because of the Liquor Control Order that limited the distribution of spirits (36).

Slowly the black market sale of whisky eased as restrictions were lifted, which was also aided by the departure of allied servicemen in Western Australia (37). Despite this, it would take years for supplies to return to normal, mostly because it had primarily been matured whisky that had been depleted, especially the popular scotch whiskies. Rather than destroy precious blends, distillers had turned over large quantities to the British Government for use in munition making (38).

Within Australia, local production was also slow to recover due to a shortage of barley that had been crucial in the wartime effort. In 1947, supplies were so low that some were even predicting whisky stocks to be depleted before the year was out (39).

This meant that some Perth hotels began rationing their whisky. Importers suggested that consumers turn to other spirits such as gin or rum, which had been quick to return to satisfactory levels because “gin does not have to mature and rum requires a shorter period than other spirits” (40).

A Renaissance?

So as you can see, the whisky was expensive, supplies had run thin, and governments were more than happy to have people consume less spirits. It was a perfect combination of factors that saw whisky fade away into the bull dust. However, Western Australia is fighting back. Local producers are bringing spirits back. Stay tuned as we delve into the modern age of distilling in WA.

P.S. If all this talk of whisky has got you thirsty, then take a look at our Western Australian distillery locator. Let them know you found them here.