Samuel Bronfman

Canadian liquor company magnate

• Born: February 27, 1889
• Birthplace: Soroki, Bessarabia, Russian Empire (now in Russia)
• Died: July 10, 1971
• Place of death: Montreal, Quebec, Canada

Bronfman entered the liquor distributing business at the beginning of Prohibition. By working around legal loopholes, he became the largest liquor distributor in North America and introduced aged whiskey to the Canadian and American markets. He devoted his adult life to philanthropy and Zionism.

Source of wealth: Sale of products

Bequeathal of wealth: Children; charity

Early Life

Samuel Bronfman (BRONF-mahn), whose last name means “liquor man” in Yiddish, was born into a wealthy Russian-Jewish family and was one of eight children. The family fled czarist Russia, fearing the anti-Jewish pogroms there, and settled in Canada in 1889. Despite their wealth in Russia, the Bronfmans lived in poverty during their first years in Canada. Samuel’s father, Yechiel Bronfman, who had been a tobacco farmer in Russia, soon realized that farming was not going to be his occupation in Canada. He began a series of jobs, first as a laborer, then in a saw mill, and finally as a merchant selling firewood and whitefish. He eventually began trading horses, which led the family to open a small hotel. The railroad boom helped their hotel take off, and soon the family was running three Canadian hotels.

First Ventures

In 1903, Samuel Bronfman purchased his first hotel and began running the family business with his brother Harry. In 1916, Samuel purchased the Bonaventure Liquor Store Company in Montreal. When Canada enacted Prohibition in 1918, the hotel business began to fall off sharply. Bronfman realized that much of the profit at his hotels was actually coming from their bars, and he decided to go into the liquor business full time. Bronfman and his brothers—Harry, Abe, and Allan—began selling spirits throughout Canada at great profit because of their scarcity during Prohibition. In 1918, a Canadian law made the importation, manufacture, and transportation of all liquor illegal, unless it was used for medicinal purposes. In response, Bronfman purchased the contract for Dewar’s whiskey from the Hudson’s Bay Company and began marketing his whiskey as elixirs and tonics through drugstores.

In 1919, the United States adopted its own Prohibition law, the Volstead Act. Prohibition was taken more seriously in the United States than in Canada, where there was not much actual implementation of the antidrinking legislation. By 1924, all Canadian laws against adult consumption of liquor were repealed. The Bronfman brothers, however, had used the period of Prohibition to build up an efficient distribution system, and in 1924 they founded the Distillers Corporation of Montreal, which sold cheap whiskey. This company’s infrastructure allowed Bronfman to supply American bootleggers with liquor from 1919 until 1933, the end of Prohibition in the United States.

Mature Wealth

Because of American Prohibition, Bronfman was able to purchase 300,000 gallons of alcohol in the United States in 1919 and bring it to Canada, where it was used to make 800,000 gallons of liquor. He distilled the product into whiskey, selling it at a 500 percent markup. In 1926, Bronfman sold a 50 percent share in Distillers Corporation to the Distillers Company, a group of British distillers that controlled most of the world’s market for Scotch whiskey. This transaction gave Bronfman the sole right to distribute the Haig, Black & White, Dewar’s, and Vat 69 brands in Canada. In 1928, Bronfman expanded his Distillers Corporation by purchasing Joseph E. Seagram & Sons, the largest liquor distillery in Canada. With Bronfman as vice president, the new company, Distillers Corporation-Seagram Limited, made $2.2 million in profits in 1928. However, American Prohibition was having a negative effect on sales, and by 1930, profits had declined. Bronfman purchased warehouses all along Canada’s eastern border with the United States and founded Atlantic Import and Atlas Shipping, two companies that facilitated the shipping of liquor into the United States. Although it was illegal to receive liquor shipments in the United States, it was not illegal for a Canadian to sell liquor, and in 1934, when the Bronfman brothers were tried for bootlegging, their case was dismissed.

Anticipating the eventual repeal of the Volstead Act in the United States, Bronfman had stockpiled whiskey; this stock was the largest private supply of aged whiskey in North America. In 1933, Bronfman acquired 20 percent of Schenley, a producer of rye whiskey. When Bronfman asked the board of directors of the Scotland-based Distillers Company to increase the price of Scotch whiskey, the board refused. In response, the Bronfman brothers raised enough money to buy out the Distillers Company’s holdings in Distillers Corporation-Seagrams Limited, and Samuel Bronfman became president of Joseph E. Seagram & Sons. He then purchased a distillery in Indiana, establishing the American branch of Seagram’s business.

Relations with Schenley were not always smooth, however, and when Bronfman learned that Schenley would not agree to age its rye whiskey, he ended his associations with this company. For years, the two companies vied for first place in worldwide whiskey sales, with Seagram emerging the victor in 1947. At about this time, Bronfman forced his brothers out of the business and took over company management, insisting that only his sons, Edgar and Charles, would ever inherit or work for Seagram.

Bronfman was committed to changing the face of the whiskey business. He wanted to distance his name from the 1922 murder of his brother-in-law, Paul Matoff, by American bootleggers and remove the perception that his product was cheap rotgut. He insisted that Seagram sell blended, aged whiskey and opened “blending libraries” in New York, Montreal, and Scotland, where scientific processes were used to ensure his products’ consistency and quality. To further ensure the quality of his product, Bronfman revolutionized the marketing and distribution of whiskey by selling it when it was already aged and bottled. Until this time, whiskey was shipped in kegs, which allowed for variations in the quality of the final product. Bronfman wanted all of his customers to know exactly what they were purchasing and be able to count on the integrity of the Seagram name. This practice soon became the industry standard. In the 1930’s, Bronfman established a large-scale advertising campaign extolling the virtues of moderate and social drinking.

Bronfman purchased Maryland Distillers, including its Calvert brand, in 1934, and in 1936 he opened a distillery in Kentucky. In 1939, he purchased the Chivas brand’s distillery in Scotland and created Chivas Regal as a tribute to King George VI when the king and his wife visited Canada. In the 1940’s Bronfman expanded his company’s product line to include the development and distribution of other types of spirits and wine. He became partners with a German vintner to purchase the Paul Masson vineyards and winery in California. Seagram further expanded by purchasing distilleries in the West Indies that made rum, including the Captain Morgan brand, and the champagne companies that produced Mumm and Perrier-Jouet, among other brands. By 1965, Bronfman’s combined worldwide liquor enterprises were operating in 119 countries at a yearly profit of $1 billion.

Bronfman also commissioned architectLudwig Mies van der Rohe to design his American headquarters in New York, and Mies van der Rohe’s Seagram Building, a skyscraper in midtown Manhattan, remains a New York City landmark. In addition, Bronfman purchased Texas Pacific Coal and Oil Company for $50 million; after his death, his heirs eventually sold this firm for $2.3 billion.

Samuel Bronfman died of prostate cancer in 1971. He had always wanted to feel accepted by society and never felt that he achieved this goal. However, his reputation in Canada and the world was so great that upon his death he finally achieved the recognition he desired, when, on the occasion of his funeral, Montreal’s airport had to be closed to regular air traffic in order to accommodate the private jets of the dignitaries attending the service.

Legacy

Samuel Bronfman’s legacy is seen in many arenas, not simply the liquor business. His lifelong work was centered on philanthropy dedicated to fighting anti-Semitism and supporting cultural institutions. In 1951, he met with Shimon Peres, the future prime minister of Israel, to help procure weapons for Israel. Using his contacts in the Canadian government, Bronfman was able to purchase $2 million worth of guns at half price. When Peres could not pay, Bronfman threw a fund-raising dinner and obtained the money. From 1939 to 1962, Bronfman was president of the Canadian Jewish Congress. He also provided a good deal of support to McGill University in Montreal, despite its history of anti-Semitism. Perhaps his greatest legacy to the country of Canada was the creation of the Samuel and Saidye Bronfman Foundation, which is dedicated to providing private capital for artistic and other ventures. He was made Companion of the Order of Canada in 1967 and awarded the Chevalier de la Légion d’honneur by France in honor of his support of Zionism.

Bibliography

Faith, Nicholas. The Bronfmans: The Rise and Fall of the House of Seagram. New York: Thomas Dunne Books, 2006. A biography of the Bronfman family, it covers the building of the Seagram empire under Samuel Bronfman and the resulting loss of billions of dollars in revenue by his heirs. It presents the loss as one of the largest ever suffered by a single family.

Gordon, Grant, and Nigel Nicholson. Family Wars: Classic Conflicts in Family Business and How to Deal with Them. London: Kogan Page, 2008. The Bronfmans are featured as an example of family feuds and their effects on family-owned businesses.

Marrus, Michael R. Samuel Bronfman: The Life and Times of Seagram’s Mr. Sam. Waltham, Mass.: Brandeis University Press, 1991. Chronicles Bronfman’s life from his birth to the creation of the largest liquor business in the world. Provides a great deal of detail about Bronfman’s businesses and deal making, while also fleshing out the details of his private life.

Newman, Peter C. Bronfman Dynasty: The Rothschilds of the New World. Toronto: McClelland & Stewart, 1978. Argues that Samuel Bronfman deserves recognition as one of the great entrepreneurs and philanthropists of the twentieth century.

Schneider, Stephen. Iced: The Story of Organized Crime in Canada. Mississauga, Ont.: John Wiley & Sons, 2009. History of organized crime in Canada, with material concerning the Bronfman family from their beginnings to their rise to prominence and their participation in bootlegging during Prohibition.