Paul Kalmanovitz

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Paul Kalmanovitz

Paul Kalmanovitz (1905-1987) was a millionaire brewing and real estate magnate best known for his ownership of the Pabst Brewing Company. Most of the Kalmanovitz Estate was left to create a charitable foundation for hospitals and universities.

Kalmanovitz was born in Łódź, Poland. He later emigrated to Egypt at the end of the World War I and worked for Sir Edmund Henry Hynman Allenby. Kalmanowitz arrived in the United States in the 1926 by jumping a merchant marine ship ^[1] and jumped from job to job, working for several notable people such as Franklin D. Roosevelt, William Randolph Hearst, and Louis B. Mayer(MGM).

In 1950 Kalmanovitz acquired the 102 Brewery in Los Angeles, California and officially enters the brewing industry. The 102 Brewery struggled for a number of years, and in 1958 faced a strong push to be bought out by the Falstaff Brewing Company. Kalmanovitz refused to be bought out, even after threatened by Falstaff to either sell or Falstaff would bury the 102 Brewery. ^[2] Within a few years Kalmanovitz turned the 102 Brewery around and began making a profit. Along with the brewery and numerous other investments, Kalmanovitz's net worth began to swell. In 1970 Kalmanovitz purchases Lucky Lager and merges the company with his 102 Brewery to form the General Brewing Company with S&P Corporation as its parent.

By 1974 Falstaff had fallen on hard times and was in need of cash. Falstaff's purchase of the Ballantine brands in 1972 have proved to be a major mistake and stretched the company a little too thin. Falstaff sells Kalmanovitz their San Francisco brewery. The cash couldn't save Falstaff, and in 1975 the company is once again in trouble. Kalmanovitz offers to inject $20 million into Falstaff for 100,000 shares of preferred stock. On 28 April 1975, Paul Kalmanovitz gains the controlling interest in the Falstaff Brewing Company. Kalmanovitz has more than quadrupled his brewery interests and is now a major force on the American beer market.

With the purchase of Falstaff, Kalmanovitz moves the Falstaff headquarters from St Louis, Missouri to San Francisco to combine them with General Brewing Company's headquarters. By June over 175 of Falstaff's corporate employees are out of work. The United States Securities and Exchange Commission (SEC) opens an investigation of the Falstaff purchase, questioning if shareholders were given proper notification of the sale. The SEC determines that the purchase was conducted improperly. Falstaff stock is barred from trading and removed from the New York Stock Exchange. Falstaff workers unhappy with the new direction of the company stage a company lockout, Kalmanovitz and General Brewing call it a strike.

Eventually things settle down with Falstaff and production is resumed. Kalmanovitz's plans to make a profit off of Falstaff isn't to turn the company around and reestablish its brand strength in the market, but rather to cut costs drastically throughout. The biggest change is the advertising budget where Kalmanovitz eliminates all types of marketing. Falstaff's market share continues to slide, resulting in plants closing and employees out of work. Falstaff is profitable for S&P Corporation, but at a cost to works and the communities around the breweries. Kalmanovitz has acquired an ailing brewery, fired the coporate personnel, reduced budgets, sold off equipment, stopped plant maintenance, and eliminated product quality control. Kalmanovitz established a standard with Falstaff that is repeated as he purchases Strohs, National Bohemian, Olympia, Pearl, and Pabst.

Breweries were not Kalmanovitz's only interests, he was also involved in helping Guide Dogs for the Blind and several other charitable organizations. Upon his death, Kalmanovitz's net worth was said to be in excess of $250 million. A sizable portion of his wealth was donated to numerous California hospitals. In addition, his estate also donated the money for the Paul and Lydia Kalmanovitz Library at the University of California, San Francisco.^[3]