Monthly Archives: July 2017

The Story of the Jewish “Laima” chocolate factory

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Laima advertising with Star of David in the middle

Since 1870 Latvia has been place of large chocolate and candy industry. The symbol of Latvian chocolate industry is “Laima” chocolate and candy factory. A factory that begun working in 1925 has been the pride of Latvian industry and regarded as exceptional Latvian achievement. The iconic Laima clock near the Monument of Freedom is famous dating and meeting place and Laima products are mass consumed and still enjoyed. However, the “Laima” history is less known to public, there is less said about the founders of the factory and the fact that Laima was the origin of a very famous Israeli chocolate and coffee company. Because the founders of Laima were Jews from Russia and Latvia who came together in 1922 to found a chocolate factory called “Makedonija” (Macedonia). In late 1924 the owners decided to rebrand their company and Laima – named after Latvian goddess of fortune was the name for the new major enterprise. The name brought fortune and Laima became one of the largest Latvian chocolate enterprise exporting its production to other countries including the US. Then in 1933-1934 the owners decided to make a risky step and invested in a new factory in the Mandate of Palestine. The new factory was called “Elite”. While the main owners moved to Palestine, their successful “Laima” company remained in their hands. In 1937 the state decided to take control over the sweets industry and bought all stocks from the Jewish owners and nationalized the factory. Also, the eldest German factory Th. Reigert was nationalized and merged with Laima. Th. Reigert dates back to 1870 so present day Laima considers its roots from 1870. The original owners moved on to Palestine and other countries and the Elite just as Laima became the main chocolate company in the State of Israel until it was bought by Strauss factory in 2004. Currently an in-depth research is going on in the archives of Latvia and Israel about the Jewish period of Laima. This is a small intro story about Laima history and its connection to Israel and Latvian Jewish history.

The main person behind Laima was Ilya Fromchenko (in Latvian Iļja (Eļja) Fromčenko). According to passport data he was born in Pskov district 1887 December 8. Before the First World War he had small chocolate business in Russia, and it’s also stated he spent time in Bulgaria. For some reason in 1920 he came to new independent country. Its possibly because he knew Ilya Kopilov before the war. Both families joined in a marriage and they lived in same house in Karlīne street 22/24 now Miera street. Here Fromchenko and Kopilov gathered a company of people from Latvia. Apparently for his bounds with Bulgaria and Balkans, Fromchenko named his new company “Makedonija”. He may hope to export his production to Balkans, but first he had to make his place in Latvian market and that was difficult at start.

In 1870 German Theodore Reigert founded first chocolate company by his name in Latvia located in Riga. In 1881 L.W.Goegginger was founded also making biscuits and canned products. In 1910 Vilhelms Ķuze founded his own factory that exceled in sweet bakery and started also making candies and chocolate. Meanwhile. Jewish proprietors, brothers Korpel and Mendel Yudin had their own Union company. First World War brought disruption as most Riga industrial factories were evacuated to Russia. In 1920 war was over and all mentioned companies restarted their work in new Republic of Latvia. The Makedonija was a new player and had to step up.

Its seems that Fromchenko and Kopilov already had a small business venture called Makedonija before the war as reports of re-evacuated companies in 1921 state that chocolate-candy factory Makedonija is awaiting a re-evacuation in Moscow. It was 1 wagon 26.000 worth in golden rubles, but it was not yet negotiated because of lack of documents. It isn’t known yet whether it was recovered. There are no entries mentioning Makedonija candy factory in 1913 address books. Latvia may have had no right to claim this wagon since the first Fromchenko enterprise was founded in Russia and Fromchenko was not yet a Latvian citizen.

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Makedonija advertising in Police Herald 1923

At the very start the Makedonija only had 4 workers. The company size grew steadily to 210 workers in 1924. First years were harsh as factory was accused of worker abuse and anti-sanitary conditions. Most workers were women employed as wrappers, while male workers were predominately bakers and recipe makers. During the first years Makedonija created the advertising slogan Laima used afterwards: “Greatest quality for most generous price!” It was a wise slogan as factory tried to attract middle and poor class customers. In late 1924 the owners of the factory came together and decided to make a major change. Allegedly Makedonija was also known as a not very profitable cigarette brand in the local market. It’s not yet clear who was the one who thought of Laima first, but it was a logical choice. All main chocolate companies had their owners’ names as their brands – Th.Reigert, V. Ķuze and L.W.Goegginger. There were also two Jewish owned companies Unions, Voshod and Prosvet. There was no such company with an original, good sounding Latvian name. So, it was Laima – goddess of fortune, the Latvian word “laime” – happiness and fortune also had association with sweetness. So it was a very vise choice. At the same time, there was a soup company Laima and many ships called Laima (one of them mysteriously disappeared in 1929 in events resembling Bermuda triangle legend) and many shops bearing this name the chocolate factory stood out.

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The Signatures of the Founders of Laima. From Latvian State History Archive

On January 1st, 1925 Makedonija was liquidated. On January 8th, the statutes for Laima were approved. On January 30th, the owners announced they have begun their work. The owners were Ilya Fromchenko, Ilya Kopelov, Jaakov Aren, Joseph Segal and David Moshevitz. Moshevitz became the chairman of the board while others had equal rights in the company rule. Berta Segal the wife of Joseph Segal was candidate for board members. Core capital was 100.000 that splits in 1000 shares, each for 100 ls. Laima inherited patents and factory location from Makedonija at Karlīnes street 22/24. While at first Laima still had to bear the problems of Makedonija as labor press reported that company had lowered the wages for candy wrappers by 34 percent disregarding the fact that previously the average pay at the enterprise was no more than 60 Latvian rubles in day. After a series of workers’ complaints, the Ministry of Labor has notified the enterprise that in time of general rise of expenses it’s unacceptable to do so and the enterprise might face issues.

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The workers of Laima. From Atpūta 1928 July 27

Despite that all factory started to sale and advertise their product. The first store was at Mazā Skārņu street 9 in Old Riga. In 1926 company released 1000 new stocks each worth 100 with overall 100.000 making whole core capital 200.000. Laima took part in state exhibitions and were well received and earned medals. New shop was open in third largest city in Latvia – Liepāja. Laima advertised their products in all main newspapers, German, Russian and Latvian and products became very popular. On 1928 in the main Latvian illustrated journal Atpūta reported that “factory holds vast 3 story brick building with a garage for 3 cars. Last year the factory turnover reached half a million lats. The company makes chocolate powder, cacao butter, chocolate bars, chocolate caramels, monpansje (French: montpensier) ice candy,  waffles of various sorts. The production output of various sorts of chocolate, candy and other products reaches 3000 kilo in 24 hours. In factories departments, there are about 30 different machines operated by 20 motors with common power of 150 hp (horse power). It’s interesting to follow the whole chocolate making workshop. Raw yet uncleansed cacao beans first enter the machine that removes dust, sand, stones and so on. After that, they are brought to kiln and cooled in a special machine, then they go to a machine where the peeling is removed, then they enter three story mills where they are turned into a liquid mass, going through a whole list of different machines, that transforms the chocolate mass, giving the needed taste and form. All this process is done in completely tidy rooms almost exclusively in a mechanical way.”

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The growth of the Makedonija-Laima factory since 1921. Socialdemocrat 1931 September 11

As Latvian economy grew,  the Laima and other sweet companies grew steadily. L.W.Goegginger, Augļu Korsums, E.Mežits, Th.Riegert and V.Ķuze along with Laima exported its production to abroad. Laima products were well received in US by Latvian exiles and were also found in stores in Europe. State laws promoted company to export abroad and helped to defend it from foreign companies. In 1929 company issues new 2000 third issue of stocks for 100 each, 200.000 in common value in so the overall core capital is 400.000 that divides in 4.000 stocks 100 ls each. This was a golden time for the company and most regarded as Latvian enterprise only few noted that company as non-Latvian enterprise was fined for issuing product without Latvian signs on etiquette.

The Great depression started in 1929. In 1930 it was reported that stock companies still gain profit as example by two sweets industry enterprises ““Laima” and Th.Reigerts.”Laima” with 400.000 capital profit 26.143, while Th Reigert with 275.000 the profit 20 017”. Factory opened new shop in Kaļķu street, also in cities of Jēkabpils, Jelgava, Bauska, Cēsis, Valmiera and other cities. In 1930 there were 450 workers and more were hired for Easter and Christmas season when sales kicked in. In 1931 Laima products were displayed at fair in London and received wide attention from press.

However, in 1931 first 50 workers had to be laid off. The crisis started to gain greater burden on Latvian industry. One of the factory directors stated: “We have fired the 50 workers because we had decided to decrease the amounts of production. The demand in sweets market is still very high, there are still many orders, but most of the customers want the price on credit. Factory does not want to start making large quantum of products on credit. Right now, not to mention already fired 50 workers the factory holds 400 workers that work in two shifts. Most of the production is made for export. Chocolate factory “Laima” does not suffer from credit restriction”. Labor press was furious and reported that Laima attempted to lower the workers’ wage. It was done in an inconspicuous way. At first, they try to confront the worker woman over some issue and in result , the wage has been cut. For many worker women who had earned 2.20 in a day now the wage has been lowered by 60 santīms. For one girl, after she “got caught” the pay was lowered by 40 santīms, in a day. As this “getting caught” and immediate punishment by a wage cut scam has become a chronic event it is clear that owners were attempting a general pay cut.

In 1932 Laima acquired a recipe of refreshing fruit chewing gum candy from a Swiss company and named it “Latvēl”. It became widely popular. Labor press was still accusing for bad worker pays in 1932: “Workers in factories (mostly women) earn from Ls 1 to Ls. 1.60. Work is on piece wages. When hiring new worker, the owners pay her Ls 1, but if she cannot fulfil this 1 Ls in five days then she is fired. But, where can new worker can adjust to work so soon and earn this one lats when for example for wrapping one   1 kg candies costs only 2 santimes. Even experienced older workers who worked for 3-4 years cannot get more than 1.60 Ls. In past, the work clothes were given by owners. Now they must be acquired by workers themselves. Also, they must wash themselves at home. Of course, the sanitary side of the products suffers greatly. The dressing room could be better. Coats are often stolen. Factory administration has found no other means to counter this, only by fining 20 santimes of each worker. Fines also are placed for load talking.  Overtime happens mostly only when orders are received from America.  But, then in most cases must work in till 12 in night. Even if worker has emergency events or must go to doctor the owner makes it clear that in case of leaving overtime will cause a job loss. Overall the worker treatment is rude. As the workers are not organized, any kind of  resistance against pay cuts or demand to improve work conditions is impossible.” The owners of the company never responded to these accusations. Its plausible that during harshest years of crisis the company had to think how to conserve the expenses and quality of worker pay and conditions suffered.

The year 1933 was a turning point. In May the gossip press stated that main owners of Laima Kopilov and Fromchenko had moved to Palestine and had started to build new factory there. Meanwhile in Latvia a new anti-Semitic fascist movement “Thundercross” became popular and started to preach hate against Laima and its’ owners. They accused them of fooling the Latvian customers for using Latvian name for their Jewish company and also accused of enslaving Christian workers. Then other calamity happened – in Jelgava exhibition an alive worm was found in one of the Laima example products. Worms in chocolate it’s a thing that sometime happens in such industry, but anti-Semitic newspapers made it look that such thing can happen only to Jewish owned companies. Thundercross compared the worm to a “fat crooked nose Jew who has hidden its head under the sign of “Laima”, happy about the good deals.”.

In this atmosphere also bearing the fact that Adolf Hitler had gained power in Germany, some far sighted people as Fromchenko and Kopilov understood that its time to move their assets to a safer place in Palestine. In 1933, first Laima’s Palestine branch factory known as Elite was built in Ramat Gan near Tel Aviv. All the workers were Jews, there was strict policy excluding Arabs from the workforce. Specialists were sent in from Riga. When Latvian nationalist press learned of this a vile accusation was thrown at owners for “flooding Latvian currency to Palestine” and building the factory for “Latvian money”. They all missed that was an early attempt of globalism.

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New Elite factory in Palestine

While building new factory in Palestine, the owners did not give up Laima. It was very profitable enterprise a reserve in case if things in Palestine goes wrong. And Palestine was no peaceful land either as tensions between Jews and Arabs grew. In 1933 Latvia had begun a standardization of Latvian sweets prices, a first step to an increased control of the sector. In 1934 Laima invested in advertising campaign for the famous Latvian aviator Herberts Cukurs. Laima produced C-3 plane model that Cukurs flew to Gambia, filled with candy. Laima sponsored the aviation festival in Daugavpils where Cukurs took part. It was 1934-1935. Years later, the Israeli intelligence agency MOSSAD accused Cukurs of taking part in Nazi crimes against Jews and hunted him down in South America and executed him. But, nobody could imagine that in 1934 when Cukurs also flew to Palestine and made lecture about in Riga Jewish club. Meanwhile the nationalistic press was angry that Latvian Aviation society partnered with a Jewish enterprise for its advertising campaign. It was pre-holocaust thinking – what is not owned by Latvian it’s not Latvian – its foreign even if its brings money to Latvian economy and people.

This growing hostility was ceased by new authoritarian Kārlis Ulmanis government who suppressed anti-Semitic remarks in newspapers because it wanted to create an illusion of unified Latvian people. While in state level a new campaign of controlling and unifying the industrial sector begun. Ulmanis took the slogan from the Thundercross movement he banned – “Latvia for Latvians! Latvian bread and labor for Latvians!”. In praxis, it was gradual state takeover of most successful industrial enterprises owned by non-Latvians. Factory operated as usual while still facing some new regulations from the state.

While in Palestine, Fromchenko and Kopilovs still owned stocks in company and Fromchenko gave them up in 1936. Fromchenko and Kopilovs faced minor fines from state for offenses in productions while living in Palestine. It was decided in state quarters that it’s time to take over the sweets industry and since the Laima main stock holders are living outside Latvia they will have to give up their stocks. In 1937 Th.Reigert and E.Mežits company went bankrupt. State decided to buy all the Laima stocks and unite the enterprise with Th.Riegert and E.Mežits to make a major state owned sweets company. It was issued in newspapers in April 14. Jewish Laima was now a Latvian Laima.

It’s not clear how reluctant were the Jewish owners to give up their enterprise, but the state was generous in rewarding since the owners received compensation in the most advantageous way in currency –the sum was paid with cheque in one of the London banks. At that moment, the Elite factory in Palestine was well established and it was safe to give up Laima. In 1936, however, the Arab revolt started causing worries for years to come. But, there was no other choice. Elit survived the revolt and World War 2 when it was the major supplier of chocolate for British soldiers in North Africa. Then in 1948 Israel gained independence and Elit moved on to become the main state chocolate producer. In 2004 other major Israeli chocolate company Strauss bought Elite and kept it as a brand. Elite as same as Laima in Latvia is widely popular and cherished brand in Israeli society.

Laima moved on and was successfully managed by new director Voldemārs Rasa. As part of national takeover, the state also gave candidate seat for board to former leader of Jezups Trasuns from the Latgale’s Progressive Farmer Alliance party. As all parties had been banned, Trasuns was out of job but was loyal to Ulmanis and asked for a paid job. While living in remote Sakstagals without any knowledge in chocolate industry he was technically a part of the factory management. In 1940 Laima was nationalized by Soviets. Soviets deported Laima director Voldemārs Rasa and his wife to Siberia. Also, Vilhelms Ķuze was deported to Siberia. His factory was renamed “17. Jūnjs” to honor the June 17 1940 when Latvia was occupied. L.W.Goegginger was also taken over by soviets, it resumed work during Nazi occupation and issued candies with wrappings honoring Nazi occupiers. After soviets returned it was renamed to “Uzvara” – victory.

Laima, Uzvara and 17. Jūnijs the three main Soviet Latvian enterprises worked and even thrived. After the regain of independence 17. Jūnijs became Staburadze. Uzvara after 10 years of independent existence was acquired by Laima that later also joined Staburadze. It had happened – many decades later the new comer Laima had absorbed all the historic rival companies that where older, in 2015 Laima was bought by Norwegian Orkla Confectionery. Laima came to same fate as Elite – it became owned by an other company but kept its brand name. Laima products are still the most popular sweets brand in Latvia and is exported to other countries.

The fate of Laima Jewish founders was varied. Fromchenko and Kopilovs families lived in Israel and maintained their company. Meanwhile Jāzeps Segals stayed in Latvia and in 1941 was deported to Siberia and tied on the way there. His wife and daughter survived. Dāvids Moševics died during the Holocaust in Latvia. They were the new titans of the Latvian sweets industry and some of them became the titans of Palestine and later Israel.

Makedonija-Laima-Elit is the story of an early global expansion from Latvia to Palestine, when owners of a successful enterprise decided to make a new grandiose investment in both advantageous and insecure land. It was also a part of the great Zionist history when Jews from all over the world risked their belongings and safety to establish a new home and business in Palestine, that one day would become a Jewish state again. Because of this, history of Laima and Elit deserves more detailed study.

 

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