The Sociedad Azucarera Antequerana and the Commercialization of Its Products (1890–1906)

Abstract

In Spain, the activity of the industry that produced sugar from beetroot began in 1883. A few years later, in 1890, the Sociedad Azucarera Antequera was founded in the municipality of Antequera, located in the region of Andalusia, with the aim of responding to the growing demand for that product and the agrarian crisis of the end of the century. In 1900–1901 the sugar factory of Azucarera Antequerana added 5.8% of the national production, meaning that it was one of the most important in the country, production that reached consumers through an effective network created by the company to sell sugar.

7.1 Introduction

The beet sugar industry in Spain began its journey in 1883, when production got under way in two beet sugar factories , López-Rubio in Granada and Martel Fernández de Córdoba in Córdoba .

A few years later, in 1890, the Sociedad Azucarera Antequerana (Antequera Sugar Company) was established. Based in the Andalusian municipality of Antequera, in the northern part of the province of Málaga , it was founded in response to the growing demand for this product and to the fin-de-siècle crisis. From the beginning of the 1800s up until 1875, Antequera had been a major centre for woollen textiles, before entering a period of stagnation that culminated in a crisis (Parejo Barranco 1987). Overseas competition with countries that benefited from lower labour costs and cheaper raw materials than in Europe complicated the situation for the most important agricultural products, primarily cereal, olive* and vine production. Furthermore, domestic competition intensified, also in textiles, due to the development of the railways (Jiménez Blanco 1986, pp. 32–34; 2012, pp. 38–39). There thus arose a need to seek out alternatives offered by the second industrial revolution and new industrial sectors, among them agro-industry. Of these new sectors, our focus in this research is on the sugar industry.

This study covers the key period between 1890, the year the company was founded, and 1906, the year of the death of the principal driving force behind the company, Francisco Romero . His death marked the start of a different stage, as founding partner José García Sarmiento took absolute control of the company.

Following this introduction, which sets out the reasons behind the foundation of the Sociedad Azucarera Antequerana, the study then explains the importance of the company and analyses the strategy it deployed to ensure a commercialization network for its products that would guarantee their sale .

7.2 Sociedad Azucarera Antequerana, a Noteworthy Company

The Sociedad Azucarera Antequerana was formed in 1890 by ten men, most of whom formed part of Antequera’s high society. The principal driving force behind the company was Francisco Romero Robledo (1838–1906), one of the great conservative politicians of the Restoration. He served as minister on several occasions and was President of the Congress of Deputies (Parejo Barranco 2006).

There are three reasons that can explain his interest in the sugar business . First, he was married to María Josefa Zulueta y Samá, ¹ who was part-owner of a sugar mill in Cuba . Second, as a large owner of rural properties in Antequera , he was affected by the fin-de-siècle crisis. Third, he knew about the reported economic rewards of beet farming in Vega de Granada in the province of Granada .

The share capital totalled 1,250,000 pesetas (pts); in 1891, the founding partners accounted for more than 43% of that total, with Romero Robledo holding 12.19%. However, if we add in the share capital held by his relatives, this percentage reached 20.49%.²

In the first season (1891–1892), the company’s San José sugar factory produced just over 387,000 kilograms (kg) of sugar . In the 1900–1901 season, it registered the highest figure in the entire period studied here: almost 3.3 million kg, which represented 5.8% of the national production, 13.75% of total production in Andalusia and 93.8% of that in the province of Málaga (Rural History Study Group 1991, pp. 784–786; Casado Bellagarza 2018).³ The fact that a market could be found for this production was thanks to a sales network that distributed sugar to a large part of the Spanish territory.

7.3 The Commercialization of Sugar

The ultimate aim of the Sociedad Azucarera Antequerana was to sell the beet sugar that it manufactured in the national market . It could not break into the international market due to its lack of competitiveness with international sugar production, whether with the sugar cane of the colonies or the beet sugar of the industrialized European nations, where the beet had a higher sucrose concentration and the factories achieved higher productivity with lower costs.

Thus, the beet sugar by-products, including molasses —the residue left after the crystallization of cane or beet sugar —were sold on the Spanish market . It was therefore necessary to develop a network of distributors to convey these products across the Spanish peninsular. We also examine the means of transport the company used to distribute its products: coastal shipping through the Port of Málaga , rail and road. Regarding rail transport , the railways and sidings, built at the same time as the factory which began operations in October 1891 (García Ariza 2016–2017), not only served as a way of receiving the supply of production inputs but was also an essential means of distributing the sugar.

In the first season, 1891–1892, the Sociedad Azucarera Antequerana produced 387,308.50 kg of sugar, which it sold for 0.71 pts/kg; as such, it generated revenues of 273,976.59 pts. For 150,000 kg of molasses , sold at 0.10 pts/kg, the company received 15,000 pts. Thus, total revenue amounted to 288,976.59 pts. The sugar was distributed to Antequera , Lucena , Montilla (Córdoba ), Málaga , Cádiz , Madrid , Murcia , Valencia and Barcelona , meaning that it reached the regions of Andalusia , Madrid , Murcia , Valencia and Catalonia . Two bags were even sent to Cuba as a sample.⁴

Selling expenses in this season amounted to 5507.32 pts, which included costs for discounts, commissions , freight, shipments and so on. It is worth noting that these expenses represented 2.48% of total expenses (Table 7.1), with this percentage ranging between 1.87% and 4.07% over the period under study. It was the least significant expenses line item; conversely, the largest outlay was on the supply of beets, which represented between 38.14% and 68.45% of expenses, depending on the year, followed by manufacturing costs, accounting for between 18.70% and 47.2% (Fernández-Paradas and García Ariza 2019, 175).

Table 7.1 Sociedad Azucarera Antequerana’s selling expenses as a percentage of total expenses (1891–1906)

As Table 7.2 shows, in February 1892 most of the representatives selling the product received a commission of 1% of sales . Moreover, it can be seen that the bulk of the sales were registered in the province of Málaga , specifically in Antequera and the capital , which accounted for 135,594.06 pts in sugar sales , almost 64% of the total. On the other hand, it is worth highlighting Grille y Gracián in Antequera and Francisco Castilla in Málaga for the large amount of sugar they sold, representing 41.1% and 21.04% of the total, respectively. The company inventories included a section for accounts receivable for sugar and other items, which included debts owing to the company for sugar, molasses , coal , wood and so on. According to the 1892 inventory, the debtors listed under this item owed 79,453.68 pts.⁵

Table 7.2 Representatives, sales total, % commission and other selling expenses incurred by the Sociedad Azucarera Antequerana as at February 1892^a

In 1892–1893, the factory produced 678,585.50 kg of sugar. The company sold it at an average of 0.88 pts/kg, yielding a total of 595,856 pts. In addition, it sold 500,000 kg of molasses at 0.098 pts/kg, that is, for 49,000 pts. The two products together generated a total of 644,856 pts.⁶

Selling expenses amounted to 13,527.64 pts, 2.56% of total expenses, slightly higher than in the previous season.⁷ As of 30 April 1893, commissions on sugar sales cost the company 5001.17 pts; as this figure represents 1% of sales , it can be inferred that sales amounted to 500,117 pts. At 0.088 pts/kg, we can estimate that the representatives placed a total of 568,315 kg of sugar in the market .

The distribution by means of domestic coastal shipping was carried out via the ports of Cádiz , Huelva , Galicia, Asturias and Bilbao on the Atlantic coast, and the ports of Cartagena-Murcia, Alicante, Valencia and Barcelona on the Mediterranean . By rail, the product reached Linares , Lucena , Montilla , Seville , Madrid , Murcia , Valladolid and Zaragoza , among other locations.⁸ It can thus be seen that there was a rise in the number of municipalities and regions receiving the sugar from Antequera , with new locations including Castile and Leon and Aragon .

The company’s Annual Report for 1892–1893 recorded that the Board of Directors were worried about the difficulty of selling molasses , due to the excessive duties imposed on industrially produced alcohols which would prevent their production. Furthermore, the Board communicated with Finance Minister Germán Gamazo y Calvo “via important people” and proposed a change to this tax that would foster sales of molasses and ensure a better price for it.⁹

In 1893–1894, the sugar reached all the same cities mentioned for the previous season, as well as some new cities, such as Gijón (Asturias ) and Santander (Cantabria).¹⁰ Selling expenses amounted to 28,036.85 pts, 2.28% of total expenses. The 1% sales commissions paid by the Sociedad Azucarera Antequerana totalled 11,296.49 pts. The company estimated the value of the sugar that remained unsold at the end of the season at 73,795 pts, out of a total of 1,363,274.40 pts. In the 1894 inventory, receivables for sugar and other items accounted for a total of 78,057.23 pts.¹¹

At the Board of Directors meeting on 17 December 1893, in light of the difficulties affecting the sale of molasses and the lack of molasses tanks, it was agreed that a new honey tank should be built to achieve the required capacity for two seasons of 20,000 tonnes each.¹²

In the 1894–1895 season, the Sociedad Azucarera Antequerana produced 1,642,327.50 kg of sugar and 120,000 kg of molasses . At 0.81 pts/kg for sugar and 0.75 pts/kg for molasses , sales prices were lower than in the previous season, generating revenues of 1,342,156.36 pts. Selling expenses totalled 20,931.39 pts, representing 1.87% of the season’s expenses,¹³ less than in the previous year. The receivables for sugar and other items amounted to 128,476.53 pts.¹⁴

In the fifth season, 1895–1896, the sugar company produced 839,199.50 kg of sugar, which was sold at 0.82 pts/kg, yielding 684,410.49 pts. In addition to this, 150,000 kg of molasses was sold at 0.073 pts/kg. The amount received for the two products totalled 695,435.07 pts.

The distribution locations were as follows: Antequera , Cádiz , Granada , Almería , Huelva , Montilla and Seville , in Andalusia ; and Madrid and Valladolid in the interior. In addition, sugar was sent to San Vicente de Alcantara (Badajoz, Extremadura), Santander , Cartagena (Murcia ), and Tarragona and Barcelona (Catalonia ) (Table 7.3).¹⁵ It should be noted that Antequera and Málaga were no longer the municipalities responsible for the highest totals; Barcelona particularly stood out in this regard, accounting for more than 41% of sales, followed by Seville , Valencia , Granada and Huelva .

Table 7.3 Representatives, sales total and % commission , and other selling expenses incurred by the Sociedad Azucarera Antequerana in the 1895–1896, as at 31 April 1896^a

The debt owed to the company for amounts owing on sugar and other items reached 113,317.06 pts.¹⁶

In 1896–1897, the San José sugar factory manufactured 1,398,630 kg of sugar and 150,000 kg of molasses . Revenues from these products amounted to 1,216,393.83 pts. Sugar reached the consumer at 0.86 pts/kg—yielding a total of 1.202.893,83 pts—and molasses at 0.090 pts/kg—generating 13,500 pts. Sugar was distributed to the same destinations as in previous seasons, reflecting the increasing consolidation of the clientele.¹⁷

The selling expenses in this season dropped by 486.24 pts, a 1.36% decrease, and accounted for 2.71% of total expenses.¹⁸ Outstanding debts for the sale of sugar reached 113,696.70 pts.¹⁹

In the 1897–1898 season, the company produced 1,594,140 kg of sugar and 280,000 kg of molasses . The sugar was sold more cheaply than in the previous season, at 0.79 pts/kg, generating revenues of 1,262,265.61 pts. Molasses was sold at 0.10 pts/kg, yielding 28,000 pts. The two products together generated 1,290,265.61 pts of revenue.²⁰ The sugar reached new cities such as Lérida and Reus, in addition to the various locations from previous seasons, reflecting the ongoing search for new markets .²¹

Selling expenses increased in absolute numbers, rising from 21,883.98 pts in the 1896–1897 season to 32,289.25 pts in the 1897–1898 season. Relative to total expenditure, these expenses accounted for 3.57% of the total in the latter season.²² With regard to the amounts owed for sugar and other items, there was a notable rise relative to 1896–1897, reaching a total of 211,788.27 pts.

In 1898–1899, the Sociedad Azucarera Antequerana produced 1,883,710.00 kg of sugar, which was sold at an average of 0.99 pts/kg, the highest price thus far in its history , generating revenues of 1,855,503.30 pts. In addition, 200,000 kg of molasses was sold to consumers at 0.090 pts/kg, totalling 18,000 pts. Revenues from the two products amounted to 1,873,503.30 pts.²³

Selling expenses amounted to 38,591.83 pts, equivalent to 3.57% of total expenses.²⁴ As for the amount owed by debtors , corresponding to sugar and other items, it rose dramatically to 655,436.69 pts.²⁵

In the ninth season (1899–1900) the San José sugar factory produced 3,055,637.40 kg of sugar and 300,000 kg of molasses . The molasses was sold at 0.08 pts/kg, generating revenues of 24,000 pts. The price of sugar was 1.11 pts/kg, giving a total of 3,427,281.39 pts, the highest figure in all the seasons analysed in this study.

Selling expenses rose considerably. In 1898–1899, they reached 38,591.83 pts and 3.53% of total expenses; in 1899–1900, the corresponding figures were 87,725.24 pts and 4.20% of expenses, that is, an increase of 0.67%.²⁶ The amount owing for sugar and other items once again grew relative to the previous year, almost doubling to 1,212,406.50 pts.²⁷

In the tenth year, 1900–1901, the company produced 3,262,908.50 kg of sugar and 552,000 kg of molasses ; it was not able to sell the latter due to the tax on non-wine alcohols . The Budget Law of 5 August 1893 replaced the 25 céntimo tax on alcohols distilled from grapes with another on production depending on the quality and capacity of the equipment . Similarly, it brought in a change in the tax regime for alcohols manufactured with Spanish or foreign honeys, setting a tax of 37.50 pts per hectolitre, regardless of their alcohol content ; it made no changes to tariffs on foreign industrially produced alcohols . It was not a favourable regulatory framework for the development of industrially produced alcohol . It sold the sugar at 0.93 pts/kg, generating revenues of 3,040,794.89 pts. This product was distributed to the locations listed for previous seasons (Martín Rodríguez 1982, pp. 182–196, 247–251).²⁸

Selling expenses amounted to 58,247.98 pts or 2.25% of total expenses. The total listed under accounts receivable for sugar and other items fell to 1,084,994.05 pts, that is, a decrease of 184,460.24 pts relative to the preceding season.²⁹

In 1901–1902, the Sociedad Azucarera Antequerana produced 2,048,067.50 kg of sugar, which was sold to consumers at a price of 0.88 pts/kg. It also produced 327,000 kg of molasses , which it was again unable to sell that season. The company registered 1,795,471.25 pts in revenues from sugar, lower than the previous year’s figure of 1,245,323.64 pts. The sugar was sent to consumers in Andalusia in Antequera , Montilla , Puente Genil (Córdoba ), Málaga , Huelva and Seville . In Galicia, it reached La Coruña and Vigo for the first time. And on the Mediterranean coast it went to Cartagena, Valencia and Barcelona . In the city of Barcelona , Manuel Giralt sold sugar worth a total of 738,982,48 pts; he was the representative reporting the highest sales figures, accounting for one-third of the total. In order of importance, he was followed by Rafael Valencia in Seville (342,006.53 pts), José González Lorenzo in La Coruña and Vigo (284,111.43 pts) and Juan Paché in Antequera (155,569.70 pts) (see Table 7.4).

Table 7.4 Representatives, sales total and % commission , and other selling expenses incurred by the Sociedad Azucarera Antequerana in the 1901–1902 season, as at 31 May 1902^a

The Annual Report noted that the excess sugar production of the 1900–1901 season had triggered a huge collapse in sugar prices ; in response, the company halved its purchases of sugar beet. Similarly, almost all factories in the Spanish peninsula cut production, but as there was so much stock left over from the previous season, prices continued to decline from August through to January before beginning to rise again.

Selling expenses amounted to 37,358.87 pts, 2.58% of total expenses; this percentage was a little higher than that of the previous season.³⁰ With all the difficulties affecting the sale of sugar in this season, it is worth noting that one of the sales representatives, Manuel Giralt of Barcelona , sold 80,153 pts in 1900–1901 and 738.982,48 pts in 1901–1902. The latter figure is indicative of remarkably strong commercial activity.³¹

Amounts receivable for sugar and other items rose to 1,093,482.35 pts, a rise of 3094.24 pts over the previous season. This is a substantial increase given the contraction in sugar production that had occurred.³²

In 1902–1903, the Sociedad Azucarera Antequerana produced 2,133,215.50 kg of sugar, which it managed to sell at a better price than in the previous season, specifically, at 1.02 pts/kg, in other words, 0.14 pts/kg more than in the previous season. It was also able to sell 215,450 kg of molasses , at 0.095 pts/kg. The two products together generated 2,197,110.96 pts of revenue, 401,639.71 pts more than in 1901–1902.³³ The sugar was distributed to the same locations.³⁴

There was a small rise in selling expenses , with the company paying out 39,746.80 pts in commissions , accounting for 2.55% of expenses, compared with 37,358.87 pts and 2.58% in the previous season.³⁵ Accounts receivable for sugar and other items amounted to 1,275,211.01 pts.³⁶

In the 1903–1904 season, the factory produced 1,947,467.50 kg of sugar, with a price to the consumer of 1.03 pts/kg—almost the same price as in the previous season—for which it earned revenues of 2,001,881.75 pts. In addition, it sold 250,000 kg of molasses at 0.060 pts/kg, yielding revenues of 15,000 pts. The total for both items was 2,016,881.75 pts. The distribution of sugar now reached Gijón and Avilés, in addition to the previously mentioned locations.³⁷

In 1903–1904, selling expenses amounted to 33,500.22 pts, representing 2.24% of total expenses. These figures were lower than those of 1902–1903: 39,746.80 pts and 2.55%.³⁸ The debt incurred by buyers for sugar and other items increased to 1,588,100.04 pts, an increase of 296,294.54 pts over the previous year.³⁹

In 1904–1905 the company made 3,027,467.00 kg of sugar. Its price rose to 1.09 pts/kg, very close to the highest price of 1.11 pts/kg registered in 1899–1900. Sales of this product generated 3,294,299.72 pts. The 300,000 kg of molasses produced was sold at 0.055 pts/kg, for a total of 16,335 pts. Thus, for the two products together it earned revenues of 3,310,634.72 pts—one of the company’s best ever results—. As the company saw it, this justified the decision not to sell out to the Sociedad General Azucarera, which had started operations in 1903. On several occasions, producers had tried unsuccessfully to cut production of sugar to control prices , until, in the 1902–1903 season, a group of financiers and sugar cane and beet growers decided to form the Sociedad General Azucarera. By June 1903, it had managed to incorporate 55 sugar factory owners; the only ones not to join were the Larios Group and six other factories, among them the San José mill (Martín Rodríguez 1982, pp. 280–286).

Sugar distribution continued in the Mediterranean —in Catalonia and the Spanish Levant—as well as on the Atlantic coast—in Galicia, Asturias and the Basque Country —. We also know that it was distributed by rail to Seville , the province of Granada , Madrid and “other places” that are not specified in the documents consulted.⁴⁰

Selling expenses amounted to 53,034.77 pts, corresponding to 2.35% of total expenses: the former figure is higher than that of the 1903–1904 season, in which a figure of 33,500,22 pts was registered.⁴¹ Accounts receivable for sugar and other items continued to increase: in 1904–1905 this figure reached 1,996,711.26 pts, compared to 1,588,100.04 pts in the previous season.⁴²

In the 1905–1906 season, the Sociedad Azucarera Antequerana produced 1,230,730 kg of sugar. The price fell to 0.91 pts/kg due to competition with the new beet sugar factories, yielding revenues of 1,121,004.06 pts. It sold 150,000 kg molasses at 0.030 pts/kg, generating 4500 pts. The two products together totalled 1,125,504.06 pts, much less than in previous seasons (Table 7.5). The sugar was distributed by means of coastal shipping, rail and road, to the abovementioned locations.⁴³

Table 7.5 Representatives, sales total and % commission , and other selling expenses incurred by the Sociedad Azucarera Antequerana in the 1905–1906 season, as at 31 May 1906^a

Comparing the information as at 31 May 1902 (Table 7.4) to that of 31 May 1906 (Table 7.5), which is less complete as it does not list the names of all the municipalities to which the sugar was distributed, we note that Cartagena does not appear in the latter and that the relative importance of the Barcelona representative, Manuel Giralt, decreased considerably. The representative who sold the most sugar was Manuel García Ceballos, with a total of 478,163.78 pts; the documentation does not provide information about the locations in which he operated, although in other seasons he supplied Antequera and Málaga . He was followed by Juan Paché in Antequera with 194,295 pts and Jose Gonzalez Lorenzo in Vigo and La Coruña with 190,368.69 pts.

Selling expenses dropped in line with the amount of the products sold. Thus, these expenses dropped to 21,545.75 pts, 2.16% of total expenses, below the corresponding figures for 1904–1905, which stood at 51,034.77 pts and 2.35%, respectively. Expenditure was thus stabilizing, as the percentage remained at just over 2% in most seasons.⁴⁴ In this season, amounts owed by buyers for sugar and other items totalled 2,103,393.18 pts—slightly higher than that of 1904–1905.⁴⁵

7.4 Conclusions

In summary, over these 15 seasons the San José sugar factory produced more than 26 million kg of sugar , with an average amount of 1.7 million kg of sugar per season. The company sold the sugar at an average price of 0.96 pts/kg, generating more than 25 million pts. If we add to this figure the revenue from almost 5 million kg of molasses , which was sold at an average price of 0.071 pts/kg, yielding more than 344,000 pts, we can see that in total the company received more than 25 million pts for the sale of these products.

Sugar was distributed to consumers via coastal shipping, rail and road. The Sociedad Azucarera Antequerana managed to sell its products throughout a large part of the national territory, even in places where competition was strongest, such as in the province of Granada , or in Zaragoza , Valladolid and Asturias , all sugar-producing areas. In short, it managed to deploy a commercialization network that enabled it to find a market for its products.

The selling expenses in the 15 seasons under study amounted to 512,298.11 pts, representing an annual average of 2.72% of the total expenses, a percentage that varied very little over the period analysed here. The amounts receivable for the sale of sugar and other items grew in almost all the seasons, rising from 79,453.68 pts in 1893–1894 to 2,103,393.18 pts in 1905–1906, the season recording the highest figure for this line item.