Business and Labor

How Narragansett Beer Survived Prohibition (But Still Couldn’t Escape the Government)

Narragansett beer survived Prohibition, but it couldn’t escape the government. Not because government agents tried to shut down the brewery during Prohibition, but because Justice Department lawyers actually tried to enforce antitrust law way back in the 1960s.

Narragansett, fondly known as ‘Gansett, ranked for decades as New England’s most popular beer. The Red Sox drank it, Dr. Seuss created its mascot and Captain Quint crushed a can of it in Jaws. You just couldn’t miss its slogan, “Hi, Neighbor! Have a ‘Gansett!”

But in 1970, St. Louis-based Anheuser-Busch began selling beer from its brad-new Merrimack, N.H., brewery. In addition to the new competition, Narragansett had other problems. It had to contend with a nine-year antitrust suit by the U.S. government to prevent another St. Louis brewery, Falstaff, from buying it.

The old Rhode Island beer died in the 1980s, but that isn’t the end of the story.

Birth of Narragansett Beer

In December 1890, the Narragansett Brewing Co. brewed its first commercial beer in its new brewery in Cranston, R.I. Six German-Americans had pooled $150,000 to start the company. You may recognize one of their names: Jacob Wirth. He was the same Jacob Wirth who ran a popular restaurant in Boston’s Theater District that survived until 2018. Rounding out the Original Six were John H. Fehlberg, Augustus F. Borchandt, Herman G. Possner, George M. Gerhard and Constand A. Moeller.

narragansett-brewery

The old Narragansett brewery.

People liked the light, sparkling beers that came out of the German breweries cropping up after the Civil War. In New England they really liked Narragansett lager.

By 1914, Narragansett had enough customers to build its own bottling plant on its 42-acre complex. That made it the biggest beer brewery in New England.

Prohibition

On Jan. 17, 1920, Prohibition took effect, prohibiting the sale of alcoholic beverages in the United States. Many breweries went under, but Narragansett survived. Fortunately for the company, it already had a business delivering ice, with its own icehouse, ice pond and refrigeration machines. Narragansett continued to deliver ice through Prohibition.

Narragansett also obtained a license to brew and sell porter for medicinal purposes. People then thought its low-alcohol and high-iron content benefited pregnant women.  Only five other U.S. breweries were allowed to do so. The brewery called it Narragansett Dark.

Narragansett also survived by turning its pilsner into a near beer with an alcohol by volume content of less than 0.5 percent. And it made ginger ale, sarsaparilla and root beer, along with a malt tonic for recovering invalids.

Narragansett, Part of the Culture

Shortly after Prohibition ended in 1933, the Haffenreffer family of Boston brewers bought the Narragansett brewery. One of the Haffenreffers attended Dartmouth College with Theodor Geisel, later Dr. Seuss. Narragansett hired Geisel – later Dr. Seuss — to illustrate advertisements for the beer. Today people collect the company’s metal trays imprinted with the very Seussical Chief Gansett, along with such slogans as “Gangway for Gansett.”

Narragansett also sponsored the Boston Red Sox and the Boston Braves. People still remember Red Sox announcer Curt Gowdy praising the ‘straight from the barrel taste.’ Mike Nichols also called it a ‘straight from the barrel taste’ in a hilarious animated commercial with Elaine May. (You can watch it here.)

Narragansett grew into New England’s largest brewery. By the 1960s it had an 80 percent share of the Rhode Island market, and 65 percent throughout New England. At its peak, Narragansett employed 850 people.

During the 1950s and 1960s, J. Joseph Garrahy worked for Narragansett as one of its top salespeople. According to legend, the many, many people he met in his job ended up voting for him, first for the Rhode Island state Senate, then as lieutenant governor and finally for four terms as governor. A popular governor, people viewed him as a friend of the working class.

Then when the U.S. Navy announced plans to scrap the battleship USS Massachusetts, her former crew campaigned to save her as a museum ship. Narragansett Brewery led the fundraising effort with paid advertisements, which ultimately succeeded in saving “Big Mamie,” now in Battleship Cove in Fall River, Mass.

Falstaff

In 1964, the St. Louis-based Falstaff Brewing Co. offered to buy the Narragansett company for about $20 million. Falstaff, then the fourth largest U.S. brewery, had no market share in the Northeast. It intended to run Narragansett as a wholly owned subsidiary.

Two days before the sale closed, the U.S. Justice Department brought an antitrust suit against Falstaff. It took nine years for the resolution of the case, which finally ended in 1973 when a U.S. district court ruled in favor of Falstaff. But nine years of legal wrangling couldn’t have helped the Rhode Island brewery.

In hindsight, the case shows how much attitudes have changed about corporate concentration. When the antitrust case reached the U.S. Supreme Court, Justice Byron White wrote the decision that acknowledged the consolidation of the New England beer market.

He noted that the number of brewers operating plants in New England fell from 32 in 1935, to 11 in 1957, to six in 1964.

But White suggested Falstaff would have figured out a way to enter the New England market anyway, and sent the case to a lower court. In the end, Falstaff won the case and took over Narragansett in 1974.

Byron White

Modern Times

While government lawyers tried to prevent Falstaff from entering the New England market by buying a brewery, Anheuser-Busch built a state-of-the-art brewery in Merrimack, N.H. It opened in 1970 and gave stiff competition to Narragansett.

Anheuser-Busch grew into a multinational behemoth called Anheuser-Busch InBev, while Falstaff sputtered.

In 1964, Falstaff and Narragansett had combined sales of about $155 million. As of Dec. 27, 2019, Anheuser-Busch InBev had annual revenue was $54.3 billion. Quick math reveals Anheuser Busch InBev is about 350 times as large as Falstaff-Narragansett was when the government brought its antitrust suit. That’s even after the Justice Department required ABI to divest the U.S. operations of MillerCoors. Adjusted for inflation, ABI today is at least 50 times as large as the combined breweries of Falstaff and Narragansett in 1964.

Rebirth of Narragansett Beer

Beset by competition, legal problems and an aging facility, Narragansett shut its doors in 1983. The company sold its equipment to China and tore down buildings in Cranston, leaving a small trolley barn that burned in 2005.

narragansett-beer

Now on your grocer’s shelves.

That year, Rhode Islander Mark Hellendrung, former Nantucket Nectars president, began to restore the Narragansett brand as a heritage beer. According to Bloomberg News, Narragansett beer is cool again as it is now popular among millennials in Brooklyn, N.Y. bars.

With thanks to Ashleigh Bennett and Kristie Martin, “Rhode Island Beer: Ocean State History on Tap” and to David Zax, “The Many Pop-Culture Moments of Narragansett, the “Forrest Gump of Beers”” in Fast Company.

Image: Narragansett logo By Source, Fair use, https://en.wikipedia.org/w/index.php?curid=32655382

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