This document, which was about 14 typewriter pages, was written to the IRS by the executor of Mario P. Tribuno’s estate. The document was given to me by the executor of the son, John L. Tribuno’s estate. The story of the company and its founder are told as well as all liabilities explained in the hopes that this artisan company will be valuated lower for tax purposes while it is transferred from father to son in 1962. This paper was financially very important so it is very well organized and persuasive especially when it comes to the liabilities. I do not think much is exaggerated because eventually in the 1970’s domestic vermouths were being out advertised 20 to 1 by Italian companies.
Tribuno was at one point in time the biggest American vermouth company and had about a quarter of the domestic vermouth market. Their vermouth was considered by some to be the greatest ever made. The company ended up being sold to Coca-Cola in 1970’s where it is now just a shadow of its former self. The paper ultimately describes the company as a “one man organization” and after two generations there was a particularly rocky market and no one to pass the torch to. Coca-cola just couldn’t man up.
The Tribuno family started a fellowship at UC Davis in Mario P. Tribuno’s name to study vermouth and commissioned Maynard Amerine to create the Annotated Bibliography of Vermouth, which after being re-popularized on this very blog!, has launched quite a few ships. Sadly, with the declining popularity of vermouth, someone shortsightedly redirected the fellowship to the study of wine aroma.
This document is followup to a project I tackled more than five years ago. I had not searched for anything related to Tribuno in a while. At the bottom, below the document, are some links and one lists many of the botanicals in the Tribuno formula.
Mario P. Tribuno was born in 1882 in Torino, Italy. His father was a vineyardist and other members of the family were in the wine business. Thus Mr. Tribuno had an early introduction to the business that as to become his life’s work.
In 1903, by arrangement with an uncle in California who was president of Italian Swiss Colony, a large wine producing organization, Mr. Tribuno came to the United States for the purpose of learning American methods of grape growing and wine making. He spent four years in California at the Italian Swiss Colony vineyards and plants. In 1907 he came East to serve the company as their eastern sales representative.
In 1909 Mr. Tribuno severed his connection with Italian Swiss Colony and went into business for himself as an importer of wines. Thereafter, he bought a California vineyard and continued in business until the event of prohibition as both an importer and domestic wine producer.
Shortly after the event of prohibition, in 1921, Mr. Tribuno organized California Grape Products, a California corporation. This company produced grape concentrate from its own vineyards as well as from purchased grapes. Mr. Tribuno continued in this business until the early 1930s, at which time he liquidated his interest. During 1926 Mr. Tribuno played a prominent part in the formation of Fruit Industries, now known as the California Wine Association, one of the largest wine cooperatives now in existence.
In 1935, shortly after repeal, Mr. Tribuno organized Vermouth Industries of America, Inc., a predecessor of the present Vermouth Industries of America, Inc. This venture, because of a 50% reduction of import duties, became economically untenable and the company was liquidated in 1939. The present Vermouth Industries of America, Inc. was incorporated in October 7, 1940.
Mr. Tribuno spent his entire business lifetime in various phases of the wine business. He was an expert on all phases of grape growing and wine and vermouth manufacture. His expertness was well known and widely recognized in the trade.
Today approximately 37% of all vermouth consumed in this country is imported from Europe and the balance, approximately 63%, is of domestic manufacture. Prior to prohibition practically all vermouth was imported. Only 5% of the total consumption was then manufactured domestically and that principally in California for local consumption within the state. In the early post-prohibition period, domestic wineries attempted to produce and sell vermouth. However, they met with little success in competing with the imported product. For the first six years after prohibition the consumption of domestic produced vermouth was not in excess of 15% of the total consumption.
With the event of World War II, foreign imports gradually dried up, and in the course of time there were no importations of vermouth from Europe whatsoever. Several Italian companies during the war years did establish vermouth making plants in Argentina and succeeded in importing Argentine manufactured vermouth into the U.S. However, this vermouth was of poor quality and did not meet with public acceptance.
During the World War II years the manufacture of domestic vermouth was greatly expanded to meet the demand created by the lack of importations. After the conclusion of the war, foreign shippers again brought their merchandise into the United States markets. With respect to more recent trends, the available statistics indicate that the total vermouth market during the period from 1949 through 1955, increased 88.9% whereas the United States vermouth increased 53% and foreign vermouth increased 106.4% During this period the United States vermouth declined from 70% to 63% of the total market. The statistics reveal that a definite shift in favor of foreign vermouths is taking place.
At the present time hearings are pending before the United States Tariff Commission with regard to the reduction of duties on imported vermouths. The domestic vermouth industry is opposing such reduction. The outcome at this point is uncertain. However, any reduction that may be made in the present duties will result in immediate unfavorable financial consequences to the domestic vermouth industry and could possibly recreate the economic situation that led to the dissolution of the predecessor Vermouth Industries of America, Inc. in 1939.
Competition among vermouth producers is very keen. There are over 300 brands of imported vermouth and over 200 brands of domestic vermouth distributed in New York State. Martini & Rossi and Cinzano imported from Italy, and Noilly Prat imported from France account for approximately 70% of all foreign vermouth sold in the United States. Some other imported brands are: From Italy – Gancia and Cora, and from France – Broissoire. Many better hotels and restaurants and private clubs feature and serve imported vermouths exclusively. Some of these establishments, to name a few, are as follows: St. Regis Hotel, Longchamps Restaurant chain, Schrafft’s Restaurant chain, Yale Club, Racquet & Tennis Club, and such New York famous restaurants as Pavillon, Chateau Briand and Voison. Some popular brands of domestic vermouth made in the United State are: Gallo, G & D, Lejon, Hublein, and Roma.
Purchasers of vermouth fall into two categories: First, those individual consumers who purchase from retail outlets individual bottles for home consumption, and second, sales to restaurants, hotels, bars and to others who are in the business of vending food and drink. Both the individual buyer and the business buyer, because of the many brands available, are extremely price conscious, and the meeting of price competition is an important factor in the operation of the vermouth manufacturer.
Prior to World War II, domestically produced vermouths were made and distributed by relatively small organizations engaged solely in the wine business. Almost invariably these companies were inadequately financed and had no funds available for the exploitation of their product through nationwide advertising channels. With the event of World War II, the large liquor companies, in an effort to replace lost whisky volume, acquired wineries and thus established themselves in the wine and vermouth business. In 1942 Schenley acquired the Roma Wine Company, and the Roma brand of vermouth; in 1941 Hublein Brothers came on the market with a Hublein brand vermouth; in 1945 Hiram Walker acquired Valliant Vineyards, Inc. and marketed a Valliant brand vermouth. Only some six months ago Seagram-Distillers Corporation acquired Fromm & Sichel, and have brought onto the market a vermouth under the very popular label of Christian Brothers. Two of the large wine companies, Gallo Wine Company, with Gallo vermouth, and Italian Swiss Colony with the Lejon and G & D brands, have, in the last two years, begun to extensively feature and advertise their vermouth line.
The entry of the large corporation in to the wine and vermouth business has forced out of the industry many of the small independents, in many instances by the bankruptcy route. The large companies operating on substantial advertising budgets are exploiting wines and vermouths on a national basis via the radio, television, newspaper and magazine media. Their willingness and capacity to spend advertising dollars dwarfs the advertising budget of an independent such as Vermouth Industries of America, Inc., which company has never spent more than $50,000 a year on all forms of advertising. Vermouth Industries of America, Inc. is faced with the bleak prospect that in the course of time the greater advertising expenditures by larger and wealthier competitors will result in a serious loss of business.
Vermouth Industries of America, Inc. occupies approximately 20,000 square feet of space on the street floor and basement floors at 420 West 45 Street, New York City. The space is rented at an annual rental of $17,000. The office as well as the manufacturing facilities are located on these premises. The company has no other facilities elsewhere.
The company’s cooperage capacity is 195,000 gallons, consisting of approximately 80 tanks of varying capacity. Approximately 40% of the cooperage was erected fifteen years ago with the balance being added through the intervening years. The cost of new cooperage is today some 18¢ a gallon. However, the resale value is only 1¢ a gallon because the principal cost of cooperage is the labor coast of erecting the tanks. The principal mechanical equipment in use in the winery is the bottling line. The company owns one bottling line, the value of which in new condition is approximately $12,000. The companies does not own any plant assets which any substantial appreciation over book values and in general, the balance sheet of the company reflects a fair approximation of the in-place value of the plant and equipment.
The company does not own its own vineyards and therefore all of its base wines must be purchased. It has been the custom of the company to contract each year with two California wineries for its needs. From time to time additional spot purchases of wine are made as conditions dictate. Wine supplies are purchased for one to two years’ needs. There have been marked fluctuations in the cost of wine, which is one of the principal cost ingredients of vermouth. The manufacturer of vermouth must invariably shoulder the brunt of increased costs, although he may also profit in a reverse situation. The inability of the finished product to readily reflect changes in basic costs makes the vermouth manufacturing business highly speculative.
The quality of vermouth is a factor ranking equally in importance with that of price. Vermouth is a wine flavored with herbs and roots. It originated in Italy some two hundred years ago. It was first used as an aperitif and drunk straight and is still so consumed today in European and Latin speaking countries. However, is today used in the United States principally as an cocktail ingredient. The sweet type or Italian type is used in the marking of Manhattan cocktails, and the dry or French type is used for the Martini and dry Manhattan cocktails.
Some thirty odd herbs and roots gathered from every continent of the world are used to make the extract which is used to flavor the wine. The extract is made by macerating several hundred pounds of herbs and roots and soaking them in wine for several months. At the end of the soaking period the wine, which is now called extract, is drained off and is aged for a period of six months or more. Approximately 1% of the extract is added to the base wine along with sugar, citric acid, caramel and other ingredients, varied as required, to make either the sweet or dry vermouth. After a period of aging, the vermouth is then filtered and bottled.
The flavor and character of the vermouth is imparted to the product by the extract. The United States Government requires that the vermouth producer file with the Government a list of all the herbs and roots which go to make the extract. However, the Government does not require that the formula show the relative quantities of the various botanicals used. This is the vermouth makers secret. Only minute quantities of some herbs are used and there are but two herbs that are common to both the sweet and dry type of vermouth.
The formulas used by the company for dry and sweet vermouth were developed by Mr. Mario P. Tribuno, the decedent, and label on each bottle of vermouth bears the legend that “This vermouth is made solely from selected California wines and imported herbs according to the original formulas of Mr. M. P. Tribuno.” At the present time the formulas are known only to Mr. John Tribuno, son of Mario. To provide for emergencies and to permit continued production of the vermouth, the formulas have been placed by Mr. John Tribuno in a vault, access to which is available on his death to his heirs.
The making of vermouth is therefore an art rather than a science. There is no stability or consistency in the botanicals used. Because of changing climatic and soil conditions each harvest produces roots and herbs somewhat different in character from previous crops. It is the vemrouth-makers art to blend with each batch of extract manufactured the 30-odd herbs and roots in such quantities so that the end result will yield a vermouth of a standard and uniform quality. Mr. Mario P. Tribuno, the decedent, during all of his years as president of Vermouth Industries of America, Inc. personally made and supervised the making of the vermouth extract and the finished vermouth according to his own secret formulas. The only person to whom the decedent had imparted his formulas and methods is his son, John Tribuno, who today is head of the company and is carrying on the work of his father. The real test of whether or not the art of vermouth making has successfully been imparted from father to son will soon come with the exhaustion of the supplies of extract manufactured under the aegis of the decedent. The drinking public is sensitive to subtle changes in taste and quality and great harm will result unless the company is able to continue to turn out a vermouth containing those characteristics of taste and quality which have created a place for Tribuno vermouth in a highly competitive market.
Vermouth Industries of America, Inc. remains a “one man” organization. John Tribuno is present, production head, general manager, “21” Brands liaison man and general factotum. The company has in its employ no other persons capable of continuing the work of John Tribuno and should he resign, become incapacitated, die or for any reason whatsoever be unavailable, the company would be unable to maintain the continuity of product quality, and generally financial loss would result on his removal from the Vermouth Industries picture.
The company distributes its product nationally through a sole distributor, “21” Brands, Inc. a prominent firm in the industry, whose operation consists of handling a line of liquor and wine products on an exclusive basis. Some of the lines it handles exclusively in addition to Tribuno vermouth are Ballantine Scotch, Hine Cognac, Boca Chica Rum and Martini wines. “21” Brands distributes directly to retail liquor stores, restaurants, bars and grills, etc. in the borough of Manhattan. Elsewhere “21” Brands acts as a jobber or primary distributor and sells the Tribuno vermouth to other distributors who in turn sell to their local customers, that is, the liquor stores, restaurants, etc.
Vermouth Industries invoices all of its shipments to “21” Brands, Inc. and Vermouth Industries has no contact whatsoever with the customers of “21” Brands, Inc.
The relationship with “21” Brands, Inc. originated in 1941. The initial agreement was set forth in a give year written contract which was not renewed at the expiration of its original terms. Since 1946, all arrangements have been made orally and there is no written contract in existence between the parties at the present time.
In 1941, “21” Brands, Inc. acquired by purchase an 18% stock interest in Vermouth Industries. They own 250 shares of the total outstanding stock of 1,450 shares. As stockholders of Vermouth Industries “21” Brands, Inc. is represented on the Board of Directors of Vermouth Industries and of course receives all financial reports of the company.
As matters now stand, “21” Brands, Inc. is the sole customer of Vermouth Industries. Vermouth Industries has no access to the real distributors of the product, that is, the liquor stores, restaurants, etc. and “21” Brands, Inc. is under no obligation to furnish such a list to Vermouth Industries. Since there is no contract with “21” Brands, Inc. they may at their own pleasure terminate the existing relationship. Recent events have given the Vermouth Industries management some cause for concern. Within the last month it was announced that “21” Brands, Inc. had acquired a distillery in Kentucky for the purpose of manufacturing their own whiskeys for distribution under their existing brand name of Club Special. The acquisition of a distillery represents a departure on the part of “21” Brands, Inc. from their previous method of operation. Without question, increases costs of operation, higher salesmens’ commissions, wages, freight rates and the general price increases which have characterized our economy of recent years, has compelled “21” Brands, Inc.to seek increased profits through expanding their operation to include manufacturing as well as distributing with the purpose of earning for themselves the manufacturers’ as well as distributor’s profit. The extension of such thinking on the part of “21” Brands, Inc. could have calamitous results insofar as Vermouth Industries is concerned. Vermouth Industries, without any access to the ultimate customer, would find itself in a difficult position to continue the distribution of its product without interruption should “21” Brands, Inc.for one reason or another be forced to or decide to discontinue its distribution of Tribuno vermouth.
At the inception of the relationship with “21” Brands, Inc. the price charged by Vermouth Industries to “21” Brands, Inc.was a matter of arms length bargaining between the parties. However, as heretofore related, “21” Brands, Inc. soon became a stockholder of Vermouth Industries and thus obtained access to Vermouth Industries financial figures and its affairs generally. As a result of such information “21” Brands, Inc. has continually brought pressure for price adjustments and other concessions which have had the result of effectively reducing the sales price of the product by Vermouth Industries to “21” Brands, Inc. For example, Vermouth Industries now pays all of the advertising bills and reimburses “21” Brands, Inc. for all or a substantial portion of expenditures made by them in connection with the sales promotion of Tribuno vermouth. The business and future of Vermouth Industries is subject to all of the infirmities and risks that result from having but a single customer, complicated in this case by the fact that the customer has a minority interest in the supplier company.
The liquor business, of which the wine industry is one branch, is without question the most highly regulated industry of its size in our economy. There is strict regulation of the industry at all government levels, federal, state and local. The Alcohol and Tax Division of the United States as they apply to alcoholic beverages including wines and vermouths. No one may engage in the liquor business unless a basic permit is obtained from the Division. The issuance of such a permit is a permissive act and is not mandatory on the part of the authorities. The Division controls ever facet of its permittees’ business operation. It determines production standards and methods of manufacture. Its rulings, which it may make arbitrarily, may and do have financial consequences to the manufacturers. For example, about a year ago the Division issued a ruling change a traditional vermouth production practice that had been in use in the industry, with government sanction, since 1933, with the result that this change in method increased the cost to make the vermouth about 8¢ a gallon. The Division also controls selling and distribution practices. For example, no alcoholic goods may be sold on consignment. Labels must be submitted for approval. Advertising programs are subject to review by the Division, and in like manner the whole conduct of the business operation is under the scrutiny and control of the Division.
The State of New York, through the State Liquor Authority by means of permissive licensing, again duplicates all of the controls of the federal government. The State Liquor Authority of New York State also controls credit practices and wholesale and retail pricing. No person can be an officer, director or substantial stockholder of a licensed liquor manufacturer, distributor or retailer without the approval of federal and state authorities. All of the various states in which the sale of alcoholic beverages is legal have Boards similar to the New York State, State Liquor Authority.
Because of these government controls the business of Vermouth Industries may be placed in jeopardy not only because of the wrong doings of its own employees, officers, and directors, but may also be placed in jeopardy by reason of the wrong doings of its distributor “21” Brands, Inc. over whose affairs of course Vermouth Industries has no exercise or control.
Instances of permittees who have sustained great financial loss because of the inability to secure license renewals are well known in the industry. These incidents involve permittees at all levels, manufacturers, distributors and retail liquor stores. A few years ago the State Liquor Authority of New York State refused to renew the license of International Distributors, Inc., a large New York company. This company was unsuccessful in its efforts in the courts to compel the state authorities to issue the license and the company closed its doors and went out of business. This company was the exclusive distributor of a well known scotch, Kings Ransom, and it is a safe surmise that all the suppliers of International Distributors were to some extent adversely affected and suffered financial loss as a result of the sudden cessation of the distribution of their products. Longchamps, Inc. was closed by the New York State Liquor Authority some years ago because of violation of the state’s credit regulations. Longchamps gave credit to its patrons for liquor consumed in the restaurant contrary to state regulations. As a result of this violation the bars of all the Longchamps restaurants were ordered closed, and this situation resulted in the sale of the restaurant to new owners at a price reputed to be 25% to 50% of the value of the business had Longchamps not been in violation of the State Liquor Authority regulations. Ilsa Wine and Liquor Company, a retail store, repudiately incurred legal fees in excess of $50,000 in an unsuccessful attempt to compel the issuance of it of a license by the New York State Liquor Authority which had refused to renew on the grounds of alleged violations.
The stock of publicly held liquor companies which are traded on stock exchanges, reflect in the relationships of book value to market price the uncertainties of the industry. In this day of inflated values and booming stock markets, the liquor stocks for the most part are priced below book values. Some current book values and market prices are as follows:
American Distilling $38.23 $23.00
Distillers-Seagram 40.33 35.00
National Distillers 24.93 25.00
Schenley Industries 52.63 19.00
Brown-Forman Distilling Co. 21.39 19.00
Talk. Visit to the Vermouth Industries of America, Inc., one of the largest vermouth-blending cellars, underneath 420 West 45 St. (between 9 and 10 Ave.) Proprietors are Mario P. and John L. Tribuno, father and son. Alcoholic content of vermouth must match label specifications. The elder Tribuno worked out the formula, more or less as a hobby, during prohibition days. The vermouth is made of white wine plus wormwood, the basic herb. They use a fortified sherry-type wine and some of the herbs used are: angelica, tonka bean, hyssop, orrisroot, rosemary, elder flower, sage, sweet marjoram, nutmeg, orange peel, and lemon peel. It is aged for about a year, and it takes a year and a half to get a batch of extract ready for mixing. – John Brooks October, 6th 1951, The New Yorker
For those with a Time Magazine subscription, here is a great article with John L. Tribuno from 1955.
PAR. 6. As a result of its Tribuno acquisition, New York Coca-Cola is the largest producer of vermouth in the United States. Tribuno holds a 12.3 percent share of the total vermouth market, and its share of domestically produced vermouth is 24 percent. Thus Tribuno ranks first among all domestic sellers of vermouth and second among all producers of vermouth. -FTC June 1979
Until its acquisition by Coke-New York, Tribuno had been a family-owned company in New Jersey bottling and blending vermouth under its trademark in its plant in New Jersey. Some vermouth was also botted for Tribuno by A. Perelli-Minetti & Sons, Delano, California from whom Tribuno also purchased bulk wine for its bottling plant in New Jersey
Tribuno did face a boycott at one point in time (1967) due to association with Perelli-Minetti. Mario Tribuno might have been associated with Perelli-Minetti since prohibiton where the produced grape concentrate for home wine making.