Benson & Hedges cigarettes are sold across the world. A former subsidiary introduced the highly successful Parliament cigarette brand to the United States.
Establishment and early growth
William Hedges (1836 – 1913) and Richard Matthias Benson (1817 – 1882) established Benson & Hedges, tobacconists and cigar importers of 13 Old Bond Street, London, in 1873. Situated on one of the most exclusive streets in the world, the firm targeted the aristocratic market.
Hedges was born in St Marylebone, the son of a coal merchant. A refined and pious man, he was a clerk by trade and a keen Wesleyan Methodist who frankly considered the tobacco business to be on the verge of immorality.
Benson was a Bristol tobacconist who had followed his father into the trade. He was a coarse man, and in many ways the opposite of Hedges. He spent much of his time at his tobacconists in Bristol, but when in London he would stand outside the Benson & Hedges shop, dressed drably, smoking a cigar and brazenly spitting onto the street.
Benson smoked fourteen to fifteen cigars a day, and died, allegedly from excessive smoking, in 1882. It was estimated that he smoked £20,000 of the firm’s stock during his lifetime.
A P Hedges enters the firm
Alfred Paget Hedges (1867 – 1929), the son of William Hedges, joined the firm as an assistant to his father following the death of Richard Benson. He possessed a fierce ambition, but was also likeable, and considered a thoroughly decent human being.
Benson & Hedges was converted into a private limited company in 1896.
Establishment of American subsidiaries
The London business attracted a number of high-spending Americans. Encouraged by their custom, William Hedges established a United States subsidiary at 288 Fifth Avenue, New York, from 1897. A relatively small business, it sold high quality cigars and manufactured premium-market cigarettes. Arthur Quinton Walsh (born 1861), a long-term bookkeeper for Benson & Hedges, was sent to manage the subsidiary.
Sales were slow to develop at Fifth Avenue. The store was located on the first floor, and was thus unable to entice window shoppers. Walsh instead found success when he established a branch outlet at affluent Newport, Rhode Island.
Walsh defied the orders of William Hedges by relocating the Fifth Avenue shop to a ground-level address at 314 Fifth Avenue in 1900. He moved again in around 1905 to 17 West 31st Street, which was to prove unsuccessful due to its more obscure location. He relocated the business to 435 Fifth Avenue from 1907.
A Canadian subsidiary was established on Cote Street, Montreal from 1906. Both North American branches were to prove successful.
William Hedges had retired by 1901, and A P Hedges had become the managing director.
A P Hedges was a man guided by his Wesleyan Methodist faith, and served as a lay preacher. He was elected as a Liberal Member of Parliament for Tunbridge in Kent from 1906 -1910.
Benson & Hedges was converted into a public company with a share capital of £120,000 in 1910, in order to fund the expansion of the London and Montreal businesses.
William Paget Hedges (born 1894) joined his father at Benson & Hedges following service in the First World War.
Company capital was almost doubled to £220,000 in 1920 in order to establish a new cigarette factory at 104, New King’s Road, Fulham, and to provide further capital for the North American subsidiaries.
The American subsidiary was highly successful on the back of a strong national economy, and the British company continued to prosper.
Meanwhile the initially successful Canadian subsidiary entered into modest losses in 1925 and 1926, triggered by an economic depression which hit the luxury trade particularly badly. This was compounded by high taxation. Benson & Hedges believed that the subsidiary would have required a very high level of advertising expenditure if it was to remain viable, and lacked sufficient capital to provide it. As a result of this, the Canadian subsidiary was sold to Adhemar Gaston Munich (1882 – 1970), a French-born Quebec investor, and a regular customer, in 1926.
The United States subsidiary was sold to two New York banking houses in 1928. With a tiny sales force of no more than 20 people, the company grew rapidly. It was to find great success with Parliament, a premium-priced filtered cigarette, from 1931. Joseph F Cullman Jr (1882 – 1955) acquired control of the company in 1941.
A P Hedges died in his London office from heart failure in 1929. Major Arthur Pearson Davison (1866 – 1955) became managing director of Benson & Hedges.
Benson & Hedges held a prestigious Royal Warrant to supply King George VI by 1946.
Benson & Hedges (USA) was the seventh largest cigarette manufacturer in America by 1952, and sales were dominated by Parliaments. However the company lacked sufficient scale to provide its growing brand with the research and marketing support that it needed. Benson & Hedges (USA) was acquired by Philip Morris, which, although the fourth largest cigarette manufacturer in the country, lacked a successful filtered cigarette brand of its own, in 1953. Sales of Parliaments tripled between 1953 and 1961, due to improved distribution and a growing market for filtered cigarettes.
Sale to Gallaher
Meanwhile, Benson & Hedges of Old Bond Street had consistently enjoyed moderate success by specialising in the luxury trade. The business was subject to a friendly takeover by Gallaher, a large British tobacco company which was attracted to the prestige value of the brand, in 1955.
Benson & Hedges held a Royal Warrant to supply the household of Queen Elizabeth II by 1956.
Gallaher sold the overseas rights to the Benson & Hedges brand outside North America to British American Tobacco in 1956.
The independent Benson & Hedges (Canada) Ltd was acquired by Philip Morris in 1958.
Benson & Hedges was the leading king-size cigarette brand in Britain by 1981.
Benson & Hedges (Canada) merged with Rothmans in 1986 to form Rothmans, Benson & Hedges Inc, in which Rothmans held a 60 percent stake, and Philip Morris held a 40 percent stake.
The Benson & Hedges premises at 13 Old Bond Street were retained until at least 1998.
The Queen Elizabeth II Royal Warrant was withdrawn in 1999.
Japan Tobacco acquired Gallaher for £9.7 billion in 2007.
Philip Morris International acquired full control of Rothmans, Benson & Hedges Inc for about C$2 billion in 2008.
Benson & Hedges remains a leading brand of Japan Tobacco, Philip Morris USA, Philip Morris International and British American Tobacco as of 2019.
Parliament is the twelfth highest-selling cigarette brand in the world.