Seagram

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This article is about the corporation. For the rapper, see Seagram (rapper).
Seagram Company Ltd.
Industry Alcoholic drinks
Fate Broken-up, assets sold
Successor(s) Vivendi, Pernod Ricard, Diageo
Founded 1857
Defunct 2000
Headquarters Montreal, Quebec
Key people Joseph E. Seagram, Bronfman family
Products Beverages
Parent Private (1857–1972);
Vivendi Universal (2000)
Subsidiaries PolyGram
Music Corporation of America

The Seagram Company Ltd. was a large corporation headquartered in Montreal, Quebec, Canada that was the largest distiller of alcoholic beverages in the world. Toward the end of its independent existence it also controlled various entertainment and other business ventures. The Seagram assets have since been acquired by other companies, notably The Coca-Cola Company, Diageo, and Pernod Ricard.

The Seagram Building, the company's American headquarters office tower at 375 Park Avenue in New York City, was designed by architect Ludwig Mies van der Rohe with Philip Johnson. The former Seagram headquarters in Montreal now belongs to McGill University, under the name Martlet House.

History[edit]

In 1857, a distillery was founded in Waterloo, Ontario. Joseph E. Seagram became a partner in 1869 and sole owner in 1883, and the company became known as Joseph E. Seagram & Sons. Many decades later, Samuel Bronfman founded Distillers Corporation Limited, in Montreal, which enjoyed substantial growth in the 1920s, in part due to Prohibition in the United States.

In 1928, a few years after the death of Joseph E. Seagram (1919), the Distillers Corporation acquired Joseph E. Seagram & Sons, and took over the Seagram name. The company was well prepared for the end of Prohibition in 1933 with an ample stock of aged whiskeys ready to sell to the newly opened American market, and it prospered accordingly. Although the Seagram brand is most closely associated with the Bronfman family the Seagram name itself pre-dated the company Bronfman founded.

Although he was never convicted of criminal activity, Samuel Bronfman's dealings with bootleggers during the Prohibition-era in the US have been researched by various historians and are documented in various peer-vetted chronicles.[1][2]

Original Seagram Distillery buildings in Waterloo, now converted to residential condominiums

After the death of Samuel Bronfman in 1971, Edgar M. Bronfman was named Chairman and Chief Executive Officer (CEO) until June 1994 when his son, Edgar Bronfman, Jr., was appointed CEO.[3]

In 1981, cash-rich and wanting to diversify, Seagram Company Ltd engineered a takeover of Conoco Inc., a major American oil and gas producing company. Although Seagram acquired a 32.2% stake in Conoco, DuPont was brought in as a white knight by the oil company and entered the bidding war. In the end, Seagram lost out in the Conoco bidding war, though in exchange for its stake in Conoco Inc., it became a 24.3% owner of DuPont. By 1995, Seagram was DuPont's largest single shareholder with four seats on the board of directors.

In 1986, the company started a memorable TV commercial campaign advertising its Golden wine cooler products. With rising star Bruce Willis as pitchman, Seagram rose from fifth place among distillers to first in just two years.[citation needed]

In 1987, Seagrams engineered a $1.2 billion takeover of French cognac maker Martell & Cie.

In 1995, Edgar Bronfman, Jr. was eager to get into the film and electronic media business. On April 6, 1995, after being approached by Bronfman, Jr., DuPont announced a deal whereby the company would buy back its shares from the Seagram company for $9 billion. Seagram's was heavily criticized by the investment community—the 24.3% stake in DuPont accounted for 70% of Seagram's earnings. Standard & Poor's took the unusual step of stating that the sale of the DuPont interest could result in a downgrade of Seagram's more than $4.2 billion of long-term debt. Bronfman, Jr., used the proceeds of the sale to acquire controlling interest in MCA, whose assets included Universal Pictures and its theme parks. Later, Seagram purchased PolyGram and Deutsche Grammophon.

Bronfman, Jr ran the media businesses poorly, and in the 1990s profits from the drinks business were used to cover the losses in the media businesses. To generate more profit from the wine and spirits business, cost cutting was implemented causing detriment to the Seagram brands and allowing competitors to increase their market share.[citation needed]

Through a series of bad deals, Bronfman, Jr. lost controlling interest in Seagram's entertainment division in 2000 to Vivendi, and the beverage division to Pernod Ricard and Diageo. By the time Vivendi began auctioning off Seagram's beverages business, the once-renowned operation consisted of around two hundred and fifty drink brands and brand extensions, in addition to its original high-profile brand names. The dismantling of the Seagram empire resulted in one of the biggest financial losses sustained by a single family.

In 2002, The Coca-Cola Company acquired the line of Seagram's mixers (ginger ale, tonic water, club soda and seltzer water) from Pernod Ricard and Diageo, as well as signing a long-term agreement to use the Seagram's name from Pernod Ricard.[4]

On April 19, 2006, Pernod Ricard announced that they would be closing the former Seagram distillery in Lawrenceburg, Indiana. However, the distillery was instead sold in 2007 to CL Financial, a holding company based in Trinidad and Tobago which then collapsed and required government intervention. They operated the distillery as Lawrenceburg Distillers Indiana. In December 2011, the distillery was purchased by MGP Ingredients, headquartered in Atchison, Kansas.[5] It is now known as MGP Indiana, and continues to be the source of the components of Seagram's Seven Crown, now owned by Diageo.

In a 2013 interview with The Globe and Mail, Charles Bronfman stated that the decisions leading to the demise of Seagram “was a disaster, it is a disaster, it will be a disaster...It was a family tragedy.”[6]

Malt Beverages[edit]

Seagram Museum[edit]

Seagram's Escapes Mickey Beverage Bodies

In 1997, the Seagram Museum, formerly the original Seagram distillery in Waterloo, was forced to close due to lack of funds. The building is now the home of the Centre for International Governance Innovation. The two original barrel houses are now the Seagram Lofts condominiums. There were almost 5 acres (2.0 ha) of open land, upon which the Balsillie School of International Affairs was subsequently built; construction began in 2009, and was completed in 2010.[7][8]

See also[edit]

References[edit]

  1. ^ Peter C. Newman, Bronfman Dynasty: The Rothschilds of the New World (1978; U.S. title: King of the Castle: The Making of a Dynasty) ISBN 0-7710-6758-5
  2. ^ Daniel Okrent, Last Call: The Rise and Fall of Prohibition pp.146-158 (2010; Simon & Schuster) ISBN 978-0-7432-7702-0
  3. ^ Edgar M. Bronfman, "Good Spirits: The Making of a Businessman" (1998) ISBN 0399143742
  4. ^ "Pernod Ricard and Diageo Sell Seagram's Mixers to The Coca-Cola Company. Business Wire May 7, 2002.". Retrieved 2010-12-29. 
  5. ^ MGP Ingredients Inc. to Purchase Lawrenceburg, Indiana Distillery Assets, company press release, Oct. 21, 2011.
  6. ^ Slater, Joanna (5 April 2013). "Charles Bronfman opens up about Seagram's demise: 'It is a disaster'". The Globe and Mail. Retrieved 2013-04-08. 
  7. ^ "Construction continues on the Balsillie Campus" July 2, 2010 http://cigicampus.cigionline.org/tag/bsia/
  8. ^ Mercer, Greg (January 8, 2009). "New Balsillie School will be 'functional, not fancy', The Record, January 8, 2009". Kitchener Record. Retrieved 2009-08-10. 
  • Faith, Nicholas. The Bronfmans: The Rise and Fall of the House of Seagram, 2006. ISBN 0-312-33219-X