The Anglo-American Tobacco War of 1901-02: A Clash of Business Cultures and Strategies

The story – possibly apocryphal but frequently related – of James Duke’s opening remark to the upstanding Player brothers of Nottingham: “Hello boys – I’m Duke from New York, come to buy your business”, speaks volumes for the cultural divide between the leading tobacco firms of Britain and the United States at the start of the twentieth century. Duke’s ruthless use of hostile takeovers as a method of rapid expansion contrasts starkly, as Chandler acknowledged, with the gentlemanly agreements that brought into existence the Imperial Tobacco Company (of Great Britain and Ireland) as the federated British antidote to Duke’s international adventuring.
The Anglo-American Tobacco War of 1901-02 was undoubtedly a clash of business cultures, but it was also an example of American quick-witted business strategy, of which the brash cultural manifestation was merely an outward reflection. In the struggle for market share in Britain, the focal point of the conflict was the (non-hostile) takeover by Duke’s American Tobacco Company of the Liverpool tobacco firm of Ogden’s. The recently available archive of Ogden’s business papers via the Liverpool Record Office allows the well-known account of the Tobacco War to be reconsidered from the point of view of the firm whose products were the focus of the competitive struggle.
Ogden’s records illustrate quite clearly how the strategy employed by Duke sought to use his ownership of the Liverpool firm to prosecute the war. The final upshot of Duke’s British invasion was a massive volume of litigation - subsequently to become known as the Ogden’s Litigation - which lasted significantly longer than the Tobacco War itself. With the cost of the litigants’ claims falling squarely on the shoulders of the newly-formed Imperial Tobacco Company, and the Ogden’s business becoming a founding arm of the internationally-oriented and highly profitable Duke-led BAT, British claims to have “seen off the invader” ring decidedly hollow.