Stubbing out of 900 jobs will signal end of era for tobacco manufacturing in Ireland

Closure of Gallahers would mean there is not a single tobacco manufacturing plant on these islands

 Gallahers has been owned by JTI since 2007.  Photograph: Chris Ratcliffe/Bloomberg

Gallahers has been owned by JTI since 2007. Photograph: Chris Ratcliffe/Bloomberg

 

The recent death of the man most associated with Ballymena, Ian Paisley, ended a political epoch. The impending death of one of the north Antrim town’s major employers, the Gallaher cigarette company, threatens the end of an industrial era.

Over the past 200 years, tobacco was big business in both Britain and Ireland, providing quality employment in both countries, but closure for Ballymena would mean there is not a single tobacco manufacturing plant on these islands.

The departure of Gallahers – owned since 2007 by Japan Tobacco International – comes following the closure of the last Irish operations of its major Irish competitor, P J Carroll.

Carroll, now a subsidiary of British American Tobacco, closed the company’s last operations at its long-time base in Dundalk in 2008, shifting the business to central Europe.

If JTI proceeds with its current plan, the operations of the maker of Silk Cut and Benson & Hedges will move to Poland and Romania. The first jobs are expected to go in May 2016, with the plant effectively vacated a year later.

In the meantime, there is a battle still to be fought as the 900 JTI Gallaher staff in Ballymena look to see if there is any chance of a reprieve. The general consensus seems to be that the omens are not good.

What is certain is that, if the plant closes, it will be devastating for Ballymena, a town and an area that benefits from some £65 million annually from Gallaher salaries and from local companies supplying the company.

There are also political recriminations. The DUP and Ulster Unionists are blaming Sinn Féin’s support for a European Union directive on cigarette manufacture in part for the prospective closure of JTI Gallaher.

Sinn Féin MEP Martina Anderson has dismissed this as nonsense, contending that it’s simply a company moving to central Europe to save on labour costs.

One can’t help but wonder what Thomas Gallaher and P J Carroll, who founded Ireland’s two most famous and most successful tobacco companies, would have thought about the end of this manufacturing era and of the huge cultural shift against smoking.

A generation ago, before it was banned from pubs, workplaces, planes, buses and other public places, smoking was just part of normal society, and brands such as Silk Cut and Benson & Hedges – or Carrolls Number 1 and Major – were among the most recognised in the world.

Gallahers and Carrolls operated either side of the Border and each, at their peak, employed more than 1,000 people in well-paid secure jobs. Work conditions were good too. Carrolls, for example, offered employees free healthcare – and free cigarettes. Gallaher workers were “paid better than teachers,” says north Antrim’s current Paisley representative, Ian jnr.

Anti-smoking lobby

People who liked to light up faced an increasingly hostile anti-smoking lobby. It took a while but attitudes changed to the point where smokers almost became pariahs – an illustration of that the rather pathetic sight of workers puffing a fag outside their offices, or drinkers standing hunched outside a pub in the rain in order to satisfy the craving for nicotine.

Long before this social transformation, Thomas Gallaher and P J Carroll would have been justifiably proud of the companies they built up and the employment they created.

Gallaher was an early Irish international entrepreneur. He was born in Templeboyle, Co Derry, in 1840 and by the time he was 17 had started his own one-man (or one-youth) business selling hand-rolled tobacco from a cart.

He was a young person with ambition and drive, and just six years later he had his first business on Hercules Street in city centre Belfast before moving his company to a larger site at York Street in the north of the city. By the 1870s, he was crossing the Atlantic annually to purchase tobacco leaf.

The company moved to Ballymena in 1941 after major damage was caused by the Luftwaffe to its huge York Street plant during the Belfast Blitz in the second World War.

Although there was a big age difference, it is just possible that Gallaher met P J Carroll, the founder of his main Irish competitor. The Dundalk manufacturer was 37 years older than Gallaher, setting up his business in 1824 when he was aged 23.

If they didn’t meet it’s likely that Gallaher encountered Carroll’s son Victor Stannus Carroll, who was also successful in expanding the company.

Other brands associated with Gallaher were cigarettes such as Senior Service, Gallaher’s Blue and Mayfair, Condor pipe tobacco, Amber Leaf roll-your-own tobacco and Hamlet cigars.

Aside from Carrolls Number 1, Major and Mick McQuaid pipe tobacco, Carrolls’ other best-known product was Sweet Afton, a non-filter cigarette, with the Robbie Burns lines on the yellow pack.

But the sector has been consolidating since the turn of the last century and the two major Irish players were unable to turn back that tide. Carrolls was taken over in 1990 by Rothmans which, in turn, was swept up by British American Tobacco.

BAT, Carrolls’ current owner is one of the big four in the modern tobacco business. Japan Tobacco is another, along with Philip Morris (now called Altria) and Imperial Tobacco.

In 2002, Carrolls’ Dundalk site was sold to the Department of Education, with the company maintaining a small section of the factory before finally ceasing all operations in 2008.

Such a fate may now be in store for JTI Gallaher in Ballymena. In its statement on Tuesday, the company refers to pressures such as the “economic environment, excise tax pressure coupled with illegal trade” that “could lead to the closure of some of its manufacturing sites”.

That “could lead” indicates the possibility of a stay of execution, although the stronger fear and, indeed, expectation is that Ballymena will shut down. The matter will be decided in the next three months.

Significant factor

Diane DoddsJim Nicholson

Parts of the directive demands that tobacco companies use larger packet sizes for cigarettes and roll-your-own tobacco.

According to Paisley, this would have required a “multi-million pound” refit in Ballymena, which made it easier for JTI Gallaher to take the option of cheaper labour in Poland and Romania.

Anderson retorted that the same directive would apply in Romania and Poland, as both countries are also in the EU, and therefore his argument didn’t stand up.

Paisley countered that, without the expense of the necessary refit, Gallaher might have been more inclined to stay put in Ballymena.

That argument went around in circles this week. A JTI Gallaher spokesman sided with Paisley’s interpretation of the matter, saying that the directive – and the consequent changing of the methods of production in Ballymena that it would have required – was a “very significant factor” in Japan Tobacco issuing its threat of closure.

Short of Northern Ireland earning an EU derogation from the directive in the next three months, or an increasingly Eurosceptic British government ignoring it, it seems it’s the end of Gallahers in Ireland after 157 years.

Thomas Gallaher and P J Carroll would have been saddened and utterly baffled by it all.