Last Drinks for Iconic Brewer

By Andrew Starke

In its heyday it was one of Australia’s largest brewers, hotel owners and a sister company of Woolworths but next year it delists from the Australian Stock Exchange (ASX) after 48 years as a publically listed company.

Tooth & Co, which began brewing beer in 1835, will cease to trade on the ASX on February 12, 2010.

Speaking at the company’s last annual general meeting, chairman David Ryan said the company’s ultimate fate rested with the resolution of an ongoing tax dispute with Australian taxation Office (ATO).

There appears little hope of any money being returned to shareholders.

“For many years we have been hopeful … (of delivering) residual value for shareholders of Tooth & Co but this prospect seems much less likely …”, he said.

The largest brewer in New South Wales for many years, the company owned the Kent Brewery on Broadway in Sydney that operated from 1835 to 1985.

It listed on the then Sydney Stock Exchange in July 1961 and between 1976 and 1982 it owned Penfolds winery.

However Tooth & Co’s general manager, Tom Watson, who ran the company for about forty years, was opposed to the company taking on debt, making it an attractive takeover target.

In 1981 a controlling interest in Tooth and Co was acquired by David Jones (Properties), then a division of the Adelaide Steamship Company (AdSteam).

AdSteam sold the brewing interests to Carlton and United Brewery (CUB) in 1983 and the remainder of Tooth & Co was caught up in its parent company’s complex structuring, debt and taxation arrangements in the early 1990s.

Adelaide businessman John Spalvins, owner of the AdStream empire, was forced to liquidate all the company’s tangible assets from 1991 to 1999, with many subsidiary entities renamed, relisted or sold during this time.

These included the 1993 float of Woolworths and David Jones renamed as DJL Ltd prior to the relisting of the Department Stores as David Jones in 1995.

This left Residual Assco Group, DJL and Tooth & Co as the ‘three ugly sisters’ left-over from the fall-out and in limbo pending the resolution of a long-running battle with the ATO.

Tooth & Co has operated as a shell of a company for many years – its shares are illiquid, it has no employees and all assets have been sold off or frozen pending the resolution of the tax dispute.

The matter returns to Federal Court in May next year after Tooth & Co was granted leave to appeal an ATO ruling.

[Wed 25/11/2009 03:46:21]