Ronan Lyons | Personal Website
Ronan Lyons | Personal Website

An Arthur’s Day post: the tale of a company worth £17.59m

Today, if you hadn’t heard, is Arthur’s Day, a celebration of all things Guinness to mark 250 years of the world’s most famous stout. Economists are known for being able to suck the life out of pretty much anything, so I thought an economic perspective on Arthur’s Day would preserve our reputation.

Without further ado, here are five random economic tidbits about the black stuff:

  • Forget the Celtic Tiger – the 1970s were good for you! According to Finfact’s Guinness Pint Index, the typical industrial worker was able to buy almost 100 pints of Guinness with his weekly wages in 1969. This had increased to 150 by 1979. Over the next 20 years, the typical number of pints you could buy fell slightly. Today’s industrial worker can buy 149 pints a week with his wages.
  • A black look at inflation: The price of a pint of Guinness now is about 100 times what it was in 1947, when it was the equivalent of 4c. By way of anecdotal comparison, a three-bedroom terraced house in South Circular Road, which sold for £1,500 that same year, increased in value 1000 times between 1947 and 2007.
  • Our (inter)national drink: Despite there being a well-developed Dublin stock exchange in the 1800s, Guinness’s had bigger ambitions and decided to list on the London Stock Exchange when they went public in 1887. Their market capitalisation was just over £2m upon floating but after some early gains it did not really increase significantly until the mid-1890s, when the UK and Ireland emerged from a generation-long economic depression.
  • A drink for the good times, not the bad: The next big gain for Guinness’s market value – shown in the graph below – happened in the years leading up to 1910, but the Great War wiped out over half of Guinness’s market value its value in early 1917 was lower than it had been in 1895.
  • Drunk on share price appreciation: The Roaring Twenties were last century’s equivalent of the Noughties, with a technological revolution and a sense of internationalism driving up share prices around the world. Guinness was no different and its market capitalisation increased almost four fold in 8 years, from £7m at the end of World War 1 to £23.4m by the end of 1925. Perhaps Guinness was a leading indicator for the rest of the economy, because – by the time the Great Depression set in in 1929 – Guinness had already lost almost half its value.
Guinness's Market Capitalization, from flotation to the Great Depression
Guinness's Market Capitalization, from flotation to the Great Depression

1759 is of course the magic number for Guinness. Anoraks, take note: the company was worth exactly £17.59m on two occasions: in February/March 1925 and then almost exactly two years later in early 1927.

If anyone’s interested, there’s a whole pile more lurking in a fascinating book I have on Guinness’s role in the Irish economy!

  • Brian J Goggin ,

    • Ronan Lyons ,

      The book is Patrick Lynch and John Vaizey’s Guinness’s Brewery in the Irish Economy, 1759-1876. It could be tricky to get a hold of, though. I picked it up at a book fair.

      Random aside, it turns out my grandmother’s cousin’s family is one of those Guinness families: something like 16 people over four generations worked there after they moved into the city following the closure of the mills in Clondalkin. In the mid-1970s, Guinness presented one of the retirees with a family tree of those who’d worked for the company.

      • Brian J Goggin ,

        Thanks. No sign of a copy for sale anywhere, but I’ve entered a Want on Abebooks.


        Leave a comment