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San Miguel Beer: A Story of Filipino Beer, a Story of the Philippines (Part Two)

This is the second piece of this two-part story.

Read San Miguel Beer: A Story of Filipino Beer, a Story of the Philippines (Part One), here.

 

Following support from the US government that ruled over the Philippines in the early 20th century, San Miguel had grown from a local brewery into a major conglomerate that enjoyed a de facto monopoly of the beer market on the islands, that is until Japan tried to edge its way in.


Japan identified the Philippines as an area of economic interest in the 1920s, seeing the islands as a provider of key natural resources and a market for Japanese goods, including Dainippon Beer (the Japanese state-backed beer company). To counter these imports, Andrés Soriano, general manager of the San Miguel conglomerate from 1924 and president from 1931 (and a grandson of one of the brewery’s original backers Pedro Pablo Róxas), lobbied the government to increase the tariffs on imported beer to protect the local industry of which San Miguel had a de facto monopoly. His position was articulated by the Manila-based The Commonwealth Advocate journal in 1936:

To our mind, it was far better that the industrialization of the Philippines should be delayed rather than risk admitting a potential enemy into our house… Let Filipino enterprise develop our resources, our industry and our trade, as much as possible.

The Commonwealth Advocate (Manila, 1936)


The cronyism engendered by American rule in the Philippines aided Soriano’s cause. Soriano was a close personal friend of the first president of the Philippine Commonwealth, Manuel Quezon, and distributed shares in his gold mine widely amongst members of the legislative assembly, a move which the Japanese decried as blatant bribery. Unsurprisingly, the higher tariffs Soriano advocated for were approved, effectively killing off the market for imported beers, and further securing San Miguel’s domination.

Undeterred, the Japanese set up a local facility in 1938 to circumvent these tariffs, and named it the Balintawak Beer Brewery. Whilst this new competitor faced stiff local opposition, it did find support amongst several leading Filipinos. Some were motivated by their hope for the end of American influence and the coming of Filipino independence, whereas others saw it as a means to get back at their economic and political rivals. Thus the struggle for beer market share became a proxy for the fight between two rival visions of the Philippines: one aligned with America, and one aligned with Japan.


The first round was won by San Miguel: apparently the quality of Balintawak’s BBB Pilsener fell far short of San Miguel’s Pale Pilsen. The second round, however, was won by Balintawak: after the Japanese invasion in December 1941, the San Miguel brewery and its stock were seized by the occupying forces and placed under the management of Japanese officials.


1954. Return home. By the middle of the century San Miguel was already the most well-drunk beer in Asia. Its fame spread to all corners of the continent. And when you make so many people happy you always want more. And what could have been a great ending for some, for them was just the beginning.

San Miguel Brewery website


Andrés Soriano saw out the Second World War as an aide to United States General Douglas MacArthur and returned home as part of the liberating American forces. The popular account of his return tells that when Soriano took back possession of the San Miguel and Balintawak breweries, he ordered for all stocked Balintawak beer to be given to American and Filipino troops for free, refusing to sully San Miguel’s reputation by selling the Japanese impostor. As recounted by soldier Frank Mathias during the aftermath the Battle of Manila in 1945:

Our eagerness to enter [Manila] was sidetracked by shouts of “Beer! Beer! Beer!” The entire column broke, running toward a huge building with a sign on top: Balintawak Brewery. As we neared we saw a scene unique in the annals of the bejungled Pacific War. Soldiers were sloshing helmets full of beer over their heads and any other heads nearby.

Frank Mathias, GI Jive: An Army Bandsman in World War II


The San Miguel business was resurrected and business was soon booming and expanding. The Philippines, fresh from achieving independence in 1946, also saw growth and expansion.

Pale Pilsen label from 1940-1952

In 1953 a group of businessmen based in Lleida in Catalonia approached Soriano directly with a business proposition: they wanted to brew San Miguel under licence in Spain. The resulting ‘Manila Agreement’ paved the way for a new brewery to be established as an affiliate, with the Filipino business providing technical assistance. The Spanish connection claimed by the San Miguel Brewery did not exist at its foundation in 1890. The brewery only became a Spanish entity sixty years after San Miguel’s foundation as a distinctly Filipino operation.


The Spanish company was renamed San Miguel Fabricas de Cerveza y Malta, S.A. in 1957, and operated largely independently of the Filipino parent. This was done in such a way that minimised its Filipino roots, to the extent that Spain’s operation is often mistakenly considered to be the more senior of the two.


How the business deal came about, why these businessmen reached out to Soriano directly or why he took the deal remains unclear. San Miguel, like many Filipino businesses up to that point, had been expanding its business in Asia and the United States and away from Spain. But Soriano still had strong connections to the European country.


Despite having been born in the Philippines, Soriano was a Spanish citizen right up until the Second World War when he was advised to give up his citizenship by MacArthur to avoid seizure of his assets if Spain were to join in the war. Still, Soriano had cultivated many links with monarchist elements and the Franco regime over the years. Perhaps the deal with Spain was a call-back to a romanticised pre-American time, a time when intrepid Spanish entrepreneurs roamed the globe. Or, ruthless and opportunistic businessman that he was, maybe it was just good business.


The Filipino San Miguel company eventually divested itself of the Spanish business in 1983 but its control in the Philippines continued to reflect the political climate. By coincidence, or perhaps not, Andrés Soriano’s son lost control of the San Miguel Corporation in the same year. His successor, Eduardo Cojuangco Jr. was a Chinese-Filipino member of the so-called ‘Rolex 12’, a group of mainly military men who were President Ferdinand Marcos’ closest advisors and friends during the dictatorial Martial Law period (1972-1986). Cojuangco used illegally-siphoned funds to buy stock from disgruntled shareholders and seize majority control of the corporation. Another associate of Marcos, Lucio Tan, had also launched the Asia Brewery the year before with the president’s blessing, intending it to be a direct competitor to San Miguel; its flagship beer was even called Pale Pilsen.

Asia Brewery's original 'Beer Hausen Pale Pilsen' is now sold as 'Beer na Beer.'

Was there a two-pronged scheme to break apart the hold that old-money Hispanic families like the Sorianos had on the alcohol industry? Who knows. But the Filipino and Spanish San Miguels would go their separate ways, signing a further agreement to carve out separate spheres of influence. It would only be in 2014 that the two breweries would come together to start cooperating again.


Even today the trajectory of San Miguel tells a story of the Philippines that goes far beyond its beer. The funds that Cojuangco used to buy up San Miguel came from the levy that Marcos had introduced in 1973 on the coconut industry, the single biggest agricultural sector at the time. Coconut farmers were to pay into the Coconut Industry Investment Fund, that would be re-invested and re-distributed back into the industry. Instead, the Marcos kleptocracy used and abused it to buy up rivals’ companies, right up until the collapse of the regime in 1986.


An unexpected outcome of this massive corruption is that the Sandiganbayan court in the Philippines now argues that the San Miguel Corporation is part-owned by the government, and by extension, the Filipino people. For if the funds used did come from the CIIF, which were paid in by coconut farmers, then the shares that the funds bought rightfully belong to the nation.

The Coco Levy Fund cases are still ongoing, and the government’s stake is still disputed – family members and allies of Marcos still proliferate in Filipino politics, society and the economy as if the People Power revolution of 1986 did not happen. San Miguel too has continued on and whilst it is amusing to think that it could actually be part-owned by the government and the people of the Philippines, the reality is that it essentially owns the beer market.


Perhaps because for the longest time it was the only beer available, perhaps because of its ubiquity, perhaps because of its price point, or perhaps even because of its fresh and crisp flavour; San Miguel, and particularly Pale Pilsen, is the beer of the Philippines, and its domination is yet to be challenged in any serious manner by neither Asia Brewery, foreign lagers, nor even the new wave of craft brewers.


The last time I was in the Philippines, I partook in the traditional drinking exercise called tagayan: a tagatagay (drinkmaster) controls access to a single source of alcohol, and pours out drinks into a single glass for one drinker at a time; once finished imbibing, the drinker passes the glass back to the tagatagay to pour out another drink for the next drinker. It’s an exercise in social bonding as much as it is in drinking, and historically would have been practised using tuba, fermented coconut sap. The alcohol of choice these days? A grande one litre bottle of San Miguel.


As we drank on into the night, finishing one bottle after another alongside the copious amounts of pulutan (food to accompany drinking), we were not thinking of San Miguel’s long and often-times controversial history, nor were we reflecting on how its power and influence may be a sign of the inequalities in contemporary society. Instead, we were enjoying a Filipino beer, in a time-honoured Filipino tradition, in the Philippines.

 

Bio:

Mark Corbyn is an English-Filipino Third Culture Kid living in London with his wife, daughter and dog. When not eating or reading and writing about Filipino food, he cooks it at supper clubs and pop-ups as part of The Adobros (@theadobros)


Works Cited:

Doreen G. Fernandez, Tikim: Essays on Philippine Food and Culture. Anvil Publishing, Inc (1994)

Grant G. Goodman, ‘Japan and Philippine Beer: the 1930s’, Journal of Southeast Asian Studies, Vol. 1, No. 1 (1970)

Frank Mathias, GI Jive: An Army Bandsman in World War II. The University Press of Kentucky (1982)

Ambeth R. Ocampo, ‘The Iceman Cometh’, The Philippine Inquirer (22 July 2015)

René Alexander D. Orquiza, Jr., Taste of Control: Food and the Filipino Colonial Mentality under American Rule. Rutgers University Press (2020)

José Rizal, Noli me Tangere (1887)

José Rizal, El Filibusterismo, F. Meyer van Loo Press (1891)

San Miguel Brewing International official website

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