It was certainly a succesful ongoing concern for many years.
Post from Jeremy McKenna on Mac Baren closure
- Thread starter geoffreybeene
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The sad part for me is they offered him to buy previously and he said no, but in the end they got it anyway.
And they will be such horrid stewards of the family/brand legacy. Lots of grave spinning, I suspect.
God knows. Clearly he does not have a clue. Especially as Gawith's remains in the family ownership, as it has been for 200+ years. After John Gawith died and there was non family management running it for a short while, there was some serious concerns but luckily family stepped back in at the helm and now all is good and going well. Awful lot of investment in the company and trying to ensure compliant and around for the foreseeable.
Not similar situation at all. Gawith's [unfortunately] do not own shipping lines and hotels or many of the other profitable businesses that the family that owned MacBaren owned. Tobacco was just one part of their business portfolio. Why would you not sell out if you had many other profitable streams in much easier business areas? The tobacco business is a constant battle, governments constantly regulating against you, taxing you, always seen as the 'bad' guy for the product you produce.
Yes you have to be passionate about it, especially as a small company, as you just would not bother otherwise. But companies have to make a profit to survive. Otherwise you cannot pay your staff, you cannot repair your machinery, you cannot buy the raw products, you cannot invest in needed technology, pay for registrations etc.....that is just common sense. No one runs a business to make a loss.
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This was inevitable, is what I get from McKenna's statement, and for a whole lot of different financial reasons. The trust board had no emotional attachment to the tobacco business, and weighing future probabilities, made the strategic decision to get out of it. They did what they're supposed to do, which is to make prudent financial decisions for their client.
The scale and scope of Sutliff's boutique focused business was profitable but not profitable enough. Let me put it this way. How many of you are willing to work 3 times as hard, for one third the pay? Because that's the effect of supporting running 100 lb and 200 lb batches through a facility like that. They might be break even, or even be a loss, which gets cancelled out by income from better sellers.
Then there's a reawakening FDA, which had been tied up in lawsuits with anti smoking groups who objected to ANY process which allows for new blends to come to market. Looks like the pressure's off and they're getting back to enforcing their vaguely worded Deeming Rule.
There's been a bit of hanky panky going on with unapproved blends being released in the interim. And that could get very expensive for the perps.
Might want to buy those imported HU tins while they're still available...
Makes sense to sell the business to a conglomerate and move on. Sucks for MacBaren and for Sutliff, but STG is a profit driven company, not anyone's nanny, so all of those small batch blends get the boot, leaving Sutliff represented by 4 mega high selling goopers.
STG isn't interested in working three times as hard to get one third the profit. They're about maximum efficiency to boost maximum profits. Less work for more pay. If that means that less blends get made and maybe that of those remaining blends, less get shipped to the US because the FDA is climbing back in the saddle, so be it.
Which is to say that you can point to your favorite bullshit villain, but it all comes down to profit. In a shrinking market, wringing out what profit one can becomes more important.
It really isn't personal. It's just business.
The scale and scope of Sutliff's boutique focused business was profitable but not profitable enough. Let me put it this way. How many of you are willing to work 3 times as hard, for one third the pay? Because that's the effect of supporting running 100 lb and 200 lb batches through a facility like that. They might be break even, or even be a loss, which gets cancelled out by income from better sellers.
Then there's a reawakening FDA, which had been tied up in lawsuits with anti smoking groups who objected to ANY process which allows for new blends to come to market. Looks like the pressure's off and they're getting back to enforcing their vaguely worded Deeming Rule.
There's been a bit of hanky panky going on with unapproved blends being released in the interim. And that could get very expensive for the perps.
Might want to buy those imported HU tins while they're still available...
Makes sense to sell the business to a conglomerate and move on. Sucks for MacBaren and for Sutliff, but STG is a profit driven company, not anyone's nanny, so all of those small batch blends get the boot, leaving Sutliff represented by 4 mega high selling goopers.
STG isn't interested in working three times as hard to get one third the profit. They're about maximum efficiency to boost maximum profits. Less work for more pay. If that means that less blends get made and maybe that of those remaining blends, less get shipped to the US because the FDA is climbing back in the saddle, so be it.
Which is to say that you can point to your favorite bullshit villain, but it all comes down to profit. In a shrinking market, wringing out what profit one can becomes more important.
It really isn't personal. It's just business.
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Just that it's now run by non-tobacco smokers who see it as a payday and not a passion project. I read through all of those responses gaslighting us about the crappy tins that wouldn't seal, the lack of sauce, etc and the combative attitude from the lawyer running their account. The writing is on the wall - just watch.
It sounds like Sutliff was already on thin ice. A business model that can’t afford necessary federal, state, and local compliance just isn’t sustainable. What if Sutliff came on hard times and needed a bridge loan? The lender would ask for FDA paperwork for due diligence and Sutliff woulda been like “Uhhhhh… 90% of our blends aren’t approved with the FDA.”
Ah ok. I will LOL!
Just because I do not smoke a pipe (regularly) does not mean running my family company is not a passion. I wouldn't be here if it was not. It's a ridiculous comment to make. Especially as you have no idea as to most of what is going on.
There was no gas lighting about tins. Just a few fail to accept business decisions and the reality! Lack of sauce - we follow old recipes, nothing has changed. Years ago there were complaints there was too much sauce, so you can't win. Some will always just moan. If my attitude is combative then it is because I am sick of answering the same questions over and over and explaining the reasons behind certain decisions. Just because you and a few others do not like those decisions, does not mean they are the wrong ones for our company.
You could say the fact that I am here putting up with a lot of the nonsense thrown my way shows I am passionate about the business and my company.
Oh and definitely not a payday......in fact I did not take a wage for the first 3 years I was involved in the company. And the family have taken no dividends or anything out for years so that we can invest in what is needed.
Some food for the discussion:
This is the five year market cap for STG
Here are their American codger blends:
boswellpipes.com
That pretty well leaves Middleton (subsidiary of Altria) as their only large (sort of) competitor for codger blends,,,in tubs only.
When you go out with your pipe and your tobacco gets low, go try and find a pouch of tobacco the same way you might buy a package of cigarettes or can of dip or pouch of chew.
STG sells all the 1 1/2 ounce packages of Captain Black and Half and Half, and Velvet,,,,if it’s in stock.
Remember the Econ 101 lectures on the buggy whip manufacturers?
It’s happening to pipe tobacco.
By the way, I love Squadron Leader, and other Gawith blends in those little cans.
Perfect for scattering around my milk barn and in Spout Spring Hollow for my descendants to find.
This is the five year market cap for STG
Here are their American codger blends:
Scandinavian (STG) Archives
STG Tobacco has a blend perfect for every smoker. All of their blends are smooth and made of the highest quality tobacco. Try some today.
boswellpipes.com
That pretty well leaves Middleton (subsidiary of Altria) as their only large (sort of) competitor for codger blends,,,in tubs only.
Middleton Pipe Tobacco ~ Middleton Carter Hall and Prince Albert Pipe Tobacco Blends are Available at Milan Tobacconists
Milan Tobacconists offers Middleton Carter Hall and Prince Albert Pipe Tobacco. Providing superior customer service and quality tobacco products since 1912. Shop our site now!
www.milantobacco.com
When you go out with your pipe and your tobacco gets low, go try and find a pouch of tobacco the same way you might buy a package of cigarettes or can of dip or pouch of chew.
STG sells all the 1 1/2 ounce packages of Captain Black and Half and Half, and Velvet,,,,if it’s in stock.
Remember the Econ 101 lectures on the buggy whip manufacturers?
It’s happening to pipe tobacco.
By the way, I love Squadron Leader, and other Gawith blends in those little cans.
Perfect for scattering around my milk barn and in Spout Spring Hollow for my descendants to find.
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that's worrying...Some food for the discussion:
This is the five year market cap for STG
View attachment 364463
Here are their American codger blends:
Scandinavian (STG) Archives
STG Tobacco has a blend perfect for every smoker. All of their blends are smooth and made of the highest quality tobacco. Try some today.
That pretty well leaves Middleton (subsidiary of Altria) as their only large (sort of) competitor for codger blends,,,in tubs only.
Middleton Pipe Tobacco ~ Middleton Carter Hall and Prince Albert Pipe Tobacco Blends are Available at Milan Tobacconists
Milan Tobacconists offers Middleton Carter Hall and Prince Albert Pipe Tobacco. Providing superior customer service and quality tobacco products since 1912. Shop our site now!www.milantobacco.com
When you go out with your pipe and your tobacco gets low, go try and find a pouch of tobacco the same way you might buy a package of cigarettes or can of dip or pouch of chew.
STG sells all the 1 1/2 ounce packages of Captain Black and Half and Half, and Velvet,,,,if it’s in stock.
Remember the Econ 101 lectures on the buggy whip manufacturers?
It’s happening to pipe tobacco.
By the way, I love Squadron Leader, and other Gawith blends in those little cans.
Perfect for scattering around my milk barn and in Spout Spring Hollow for my descendants to find.
I think I was out of the loop for a year and a half, I come back for a glimpse of where we are at currently and find out this terrible news. I never imagined Mac Baren would sell, they were always my old reliable. What a shame. I mean I knew a lot was going to happen while I stayed away from the forums but I did not see this one coming. I heard that STG will only be keeping about 13 blends of theirs. I just heard what Brian Levine said on the podcast, no. 643 last night.
Can we make a list of all of the things that are unhealthy but perfectly legal and socially acceptable? Fast food, candy, soft drinks, alcohol, overprescription of pharmaceuticals. In recent years sports gambling and cannabis have become legal in many jurisdictions, while we continue to vilify tobacco. In Canada the same government that sells you cannabis (and teaches you how to use it!) thinks that nicotine pouches are dangerous and has made them illegal.
Maybe people who enjoy tobacco should fight back against these unrelenting infringements of our freedom. Lord knows, nobody else will.
Sounds like frosty mint did them in. People shocked at a business divesting it's tobacco when dunhill did it years ago.
I agree, I’ve seen nothing but good things happening with Gawith. Better availability & more options in the US. I’m absolutely happy to see what y’all have been doing. Please keep up the good work, I can assure you that most pipe smokers appreciate it.
In my bass-ackwards state, it’s easier, cheaper, and more socially acceptable to smoke weed than pipe tobacco. ‘Splain that one.
Sounds like my bass-ackwards country. Weed is legally available on practically every street corner, and the government sells it through mail order, but cigars and pipe tobacco are taxed at over 300% and very hard to find.In my bass-ackwards state, it’s easier, cheaper, and more socially acceptable to smoke weed than pipe tobacco. ‘Splain that one.
I’m late to this but my take away is that the Board of Directors may have acted poorly and maybe breached their fiduciary duty. A board had a duty to ensure a company can and will pay its debts on time which Mac Baren could obviously do. Their second obligation is to create value for the share holder of which there are only two. So the board invests in other companies after the majority share holder passes so if one had to do a financial audit one would have to ask if these decisions were sound. The other notable thing about Mac Baren’s corporate structure is that there was an over arching trust. This poses difficulties for the board because trusts are governed by common law not corporate law. So the trust would have and was obligated to consider the outcome of a sale and the ramifications on staff and the community at large given its importance to the town. So there may have been a breach of trust too. Companies with this sort of structure find it very difficult to sell because of the two competing law premise and I’d suggest it’s why Heinrich set it up this way to protect his legacy.
How do I know this, well I was a Director and Chairman of a Board that had exactly the same structure and we went through a sales process and it was not a simple thing. Corporate law which is the fiduciary obligations of the board are black and white and this law is relatively new, say the last 100 years or so. Trust law is based on common law and it is drawn for 600 years of precedents through the court system and as such is very grey and by default the two “laws” argue against each other.
One would need the minutes from the Directors meetings and the minutes from the Unit Holders meetings (The Trust) to understand fully what has transpired but on face value what was done was in breach of one or the other or both sets of law but we shall never know.
How do I know this, well I was a Director and Chairman of a Board that had exactly the same structure and we went through a sales process and it was not a simple thing. Corporate law which is the fiduciary obligations of the board are black and white and this law is relatively new, say the last 100 years or so. Trust law is based on common law and it is drawn for 600 years of precedents through the court system and as such is very grey and by default the two “laws” argue against each other.
One would need the minutes from the Directors meetings and the minutes from the Unit Holders meetings (The Trust) to understand fully what has transpired but on face value what was done was in breach of one or the other or both sets of law but we shall never know.
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I'm with ya. I live in eastern North Carolina. This is tobacco country. I have a couple of acres that used to be part of a tobacco farm. Tobacco is still grown in the fields across the street from me and behind me. The land across from me is owned by the county school system and tobacco is grown on it. Yup, things are different in Johnston county.