Hamilton Logan – Richmonds
Michael Fowler: [Background noise] Welcome everybody, welcome to Landmarks. As you all know my name is Michael Fowler, and it’s a great pleasure to introduce Hamilton Logan. Many will be familiar with Hamilton, a lot of you having worked with Hamilton. Now Hamilton of course was a member of the Richmonds Board since 1975, and its Chairman from 1982 to 1990. So welcome to you tonight, Hamilton – thank you very much. [Applause]
Hamilton: Thank you, Michael. Good evening ladies and gentlemen. It is quite a long history that I’m going to talk about tonight, you can’t skip over 1930 to 2005 in twenty minutes, but I have tried to pull out the salient parts and talk about one or two of the people that will be familiar to most of you that did so much for Richmonds.
The founder, William Richmond, came from a little place just north of Oban on the west cost of Scotland, and they lived on a dairy farm but unfortunately the herd was wiped out by anthrax and they moved a little further towards the coast to a place called Torran. And those of you that know your Hawke’s Bay well would know that Bill Richmond lived at ‘Torran’ at Raukawa, and Jim lived at Oban. So that’s the significance of those two names.
At the age of seventeen, William Richmond decided that life was too quiet for him up in the ‘healands’, [highlands] so he ventured to come out to New Zealand. He first of all went to Banks Peninsula where there is a family connection, and after that he worked in Canterbury, coming to Hawke’s Bay in 1982  at the age of twenty-three. And he went and worked at Chesterhope, and you all know where Chesterhope is; where Mrs Fernie used to live … or Miss Fernie … beautiful property – I don’t know what size it was then, but of course today it’s about about twelve hundred acres. And that was owned by William Nelson, and William Nelson also owned Tomoana Freezing Works, and of course he lived at Waikoko. So that was the beginning of the connection between WR [William Richmond] and WN [William Nelson].
WN noticed this bright young Scot, and it wasn’t long before he had him into his office and invited him to join the staff at Tomoana. But WR said “No sir, thank you very much, but I want to learn more about the pastoral scene and I will be quite happy to stay at Chesterhope.” And he quickly rose up to No 2 at Chesterhope. And then WN called him into his office again, and he said “Now, young man, have you served your apprenticeship?” Upon which WR said “I think I’ve done some of it, sir”. “Well”, he said “I’ve got a job for you – I would like you to become a stock picker in Tomoana.” And this time WR said “ Yes sir, I will accept it. But what do you pay?” And old William Nelson thought for a while, and WR helped him by saying “Sir, how much does it cost you to procure a lamb for your freezing works?” And William Nelson said “six pence”, so WR replied “that’s my price”, and he started work the next day.
He had a huge area in which to work, and it stretched from Wairoa to Porangahau – just imagine that! Horseback stuff. And he worked very, very long hours. And you must remember that there was no road transport in those days, either for transporting stock or for running around with your bit of raddle. And so what he’d do, he’d work an area, and he would mark all the lambs that he drafted with different raddles according to the ear-mark, and then he would send a drover up the road and he might end up with three or four thousand lambs – who knows? And they’d all be driven into Tomoana, and then they’d be drafted into their owner’s lots. Now WR had a computer-like memory. He seldom forgot a tally, and he never forgot an ear-mark, and so when he used to go draft these sheep into their different lots at the yard, he could get them bang on, and knew where they came from and knew what the tallies were, even though he hardly ever wrote anything down. Why do we have computers?
WR was very grateful for WN having given him the opportunity to get involved in the livestock industry. [The] meat industry was booming at the time, and the main scene was for prime lamb. And William Nelson said to WR one day, “I would like to kill three hundred thousand prime lambs this year. Can you get them?” And William Nelson [Richmond] said “Yes – but difficult.” And so the wager was, “you get them and you get £3,000 … miss by one and you get nothing.” And WR being the gambler that he was, said “it’s a deal”.
Anyway, he absolutely exhausted himself getting them, because it was a very poor season. He got them in the last week, picked up his cheque and took young bride back to Scotland and England. But William Nelson didn’t let him go empty-handed – he gave him a lot of good introductions to the people in the meat industry over in the UK. And he discovered when he was over there that there was a market for the seconds, or the thinner lamb, that sometimes I fear wasn’t exported, and sometimes it was rendered down. And he came back full of enthusiasm and talked to William Nelson about it, and William Nelson wasn’t the least degree interested. He said, “the UK market is for prime lamb”. But he said “if you’re so certain that there’s a market, you can take the whole seconds crop.” Whereupon William Richmond said “Yes, I will do that”. And he made so much money, and marketed them on his own account, that William Nelson never repeated the offer again.
But by this time, WR had got marketing and running his own cutter very much in the blood. And it wasn’t long before he decided to start his own business round about 1920, and he very quickly ran into trouble with a thing called a Depression, which I don’t think many of us know about [chuckle] but there was a very bad Depression in 1922, and then of course a lot later. Two people that live on the East Coast up in the Gisborne area came to his rescue, and they guaranteed his account – A B and H B Williams. How often have we heard that name?
Then the great Depression came in 1929, and that put William Richmond out of business. He’d been too optimistic in the price he’d paid the farmers, and he’d been too optimistic in what he felt the UK market would return, and he virtually went bankrupt. And to exacerbate the situation, he tried to corner the wether market with Wilfred Stead and both men lost very heavily. I think that’s enough about him, except that everything he did, he did at a furious pace. I asked Bill Richmond the other day if he used to ride a motorbike when he gave up riding horses, and he said he can’t remember it, because he said “I wasn’t born.” [Chuckles] But he said he can’t remember him riding a motorbike, but I have heard whispers about him riding a motorbike, but we’ll assume he didn’t. But he got his first car about 1920, and it was always in the repair shop. He drove it at a furious pace, and the roads sometimes weren’t wide enough. So I think that all that I’d like to end up in saying about William Richmond at this stage, is that he was truly a remarkable person, and that the export industry and farmers owe him much. He was rightfully called ‘the farmer’s friend’, a quality that was well enshrined in the Richmonds’ culture. And I think most of you that have been Richmond clients at some time or another would understand that.
So William Richmond had gone bung. He had a lot of clients that had supported him. Whakatu opened in 1915, and was still a fledgling company, and so what was to happen? Were William Richmond’s clients to go back cap in hand to Whakatu, or to Tomoana? So an accountant in Hastings by the name of William McCulloch, and you all probably know about the home of McCulloch, Butler & Spence – well, William McCulloch was one of the early principals. He saw the gravity of the situation and as so many of his clients were suppliers of William Richmond, he moved very quickly, and he got twenty of them together and sought a pledge from them. It wasn’t quite enough money for what they needed, and so he went to Whakatu. And Whakatu always seemed to have money, which was great, and they put up £4,000, which was somewhere round about a sixth of what was needed. And William McCulloch was very grateful for that. There were conditions though, that Whakatu attached to their loan … or their capital, should I say … and that was that seventy-five per cent of all stock processed in the Hawke’s Bay area be slaughtered at Whakatu, providing the company – and this is always a very good one – providing the company was able to do it. And we do have droughts in Hawke’s Bay, and sometimes outside clients get on the wrong end of the queue.
WR was elected Chairman of the company, and Mr Edridge was Secretary, and he held that position until Les Fisher took over from him in 1937. William McCulloch felt uncomfortable at being a shareholder, seeing he was also the financial adviser, and so he sold his £2,000 stake to Sheed Thompson. They were a company in the UK that William Richmond had done business with when he was selling the seconds into the UK. And they proved to be a wonderful friend of William Richmond. And Andrew Thompson was out here in New Zealand, and he was so accommodating in taking the Richmond kill and marketing it, that once again Richmonds owes much to Sheed Thompson for the early trading.
During 1930 and ‘31 the Depression was still raging, so it was very difficult for companies that had only recently started up to keep going, and things weren’t good. And to cap it all off, the earthquake came in 1931. It didn’t only flatten Borthwick’s Works at Pakipaki, but it also put Whakatu, Tomoana and Wairoa out of business. It was the middle of a drought; there were lambs on the road with drovers; what could you do? Well, it wasn’t very long before outside Works even [as] far as to Auckland, contacted WR and said “we’ll take your stock. We’ll process it until you can get it done in Hawke’s Bay again.” I think this just says something about the man – you know, he must have had an enormous amount of charisma to be able to get that sort of deal. But better still, the Richmonds’ stocks were only insured from scale to the London in-store market. And the small print didn’t say anything about earthquake cover – in fact it said the reverse. And Richmonds were insured with Lloyds, and naturally everybody thought ‘well, Lloyds will drive a hard bargain’. But it wasn’t the case … they were in the office within a month; went through the stocks that were lost, and other things that were lost by Richmonds; wrote out a cheque for the full indemnity of everything. Never, ever enforced the non-payment for an earthquake. So that was a huge benefit to Richmonds, otherwise they would’ve gone belly-up again.
1932 was an even worse year and Richmonds made a loss of £28,000, so the banks quickly stepped in and enforced quite a number of things, including a strict overdraft limit, the raising of capital, and only allowing Richmonds to sell on commission. This gave Richmonds some breathing space, and once again it was Tomoana who came to WR’s assistance.
Vestey’s in the meantime had bought W & R Fletcher, which were the owners of Tomoana at this time having bought from William Nelson. And they chose to move their office, which was just down here in Market Street, out to Tomoana – out where it possibly should’ve been – out at the Works. So that gave the opportunity for Richmonds to buy the Market Street office, which they did for the pricey [princely] sum of £2,500. They stayed there for thirty-eight years and sold it for $40,000, which I suppose when you take inflation into account, wasn’t all that wonderful, but Les Fisher’s remark was typical: “It was perhaps the most profitable deal that the company had ever made”. [Chuckles] And any of you that knew Les Fisher knew that he spoke a little bit like that. [Chuckle]
In 1934 the processing industry … it all took another kick to one side, and this was when the solo butchers went on strike. And the solo butchers really were god in the early days of the processing industry. And I knew one or two of them … older than me of course … but I knew one fellow that worked in the Wairoa Works, and he used to play rugby up there. And solo butchers by and large were controlled to not exceed a hundred a day … they usually used to kill about ninety-three or ninety-six or something like that, but they weren’t really allowed to go over a hundred – I don’t know whether that was because of physical reasons. Anyway, this young fellow in Wairoa that I knew used to have his hundred hung up before twelve [pm], and then go and play rugby, [chuckle] so that tells you a thing or two. I could tell you a lot about solo butchers, but this isn’t a talk about it. But anyway, what happened in 1934 was that solo butchers went out on strike. The chain system was just emerging in the United States in the cattle industry; someone from Tomoana went and had a look at it and they were the first to put chains in, quickly followed by Whakatu. And that broke the back of the solo butchers, and so the freezing industry moved forward a couple of notches after this.
War broke out in 1939 and Britain badly needed protein. And some of you may remember, all meat [and] dairy produce was commandeered by the New Zealand Government and shipped to Britain because they were starving. And that lasted for fifteen years until 1954. And it was a time for Richmonds to make steady profit which they consolidated, and so by 1954 Richmonds was well and truly on its feet, and I think you can say, thanks to the humps and bumps of the market being taken out of their control.
1957 saw a pretty acrimonious all-up in Richmonds. John Barker, who some of you know of by reputation because when we were young he used to occupy a place in the Hastings Club, and you never went near it – it was absolutely sacrosanct. But John Barker was a Director of Whakatu, along with Mr Chadwick who was Chairman of Whakatu, were the two Whakatu nominees on the Richmonds’ Board. John Barker heard a whisper about something that was happening in Richmonds. And you know … things happened in those days that have happened since … something fell off the back of a truck, and it had John Barker’s signature. And on the signature it said that the whole of the undertaking of W Richmond Limited be offered for sale by private tender. Now there were of course, a lot of question marks as to why he’d taken that step. He was a Director of Whakatu; Richmonds was getting a lot of Whakatu’s client’s stock. Anyway, we’ll be charitable.
So a general meeting was called, and it all boiled down to the fact – and they were talking in innuendos – that WR had advanced some money to Mr Lew Harris, who was trading under the name of L E Harris & Co, to tide him over because he was running a bit short of cash, and you know … obviously after a lot of outrage, and the receipts weren’t coming home. And John Barker heard about this, and he was after his good old friend’s blood. Anyway, to cut a long story short, Les Fisher turned up the Articles of Association which stated that the company could lend or advance money to anybody, and so that blew Mr Barker out of the water. But then Mr Chadwick and H M Campbell, who was then the Member of Parliament for Hawke’s Bay – they got up, and they were very disparaging in what they said about their old friend, and the person that had done so much to fill their pockets at times. Anyway, another member, Mr Robson, who was friendly with these gentlemen but wanted to have a bob each way, called for a private ballot, and Robert Harding from Raukawa, got up and said “we’re not having a private ballot – let them stand up and be counted”. And so they took a public showing of hands, and only those four gentlemen supported it, and of course that put them in a little bit of trouble. Mr Chadwick resigned; Mr Campbell resigned; John Barker stayed on. But the worst thing was that Mr Chadwick took Whakatu out of Richmonds. And that ended, or was the beginning of the end should I say, of a wonderful partnership between Richmonds and Whakatu, and something that could’ve really, and should’ve really gone on until the end of Whakatu and Richmonds. But anyway, that’s what happened. The upshot of it was that Mr Howard Glazebrook was Chairman, and Mr Richmond went on as Chief Executive, but he spent most of his time out buying stock, the thing that he knew best, and could do best.
Les Fisher by this time had come into his seat as General Manager. And I remember Les so well – he was a wonderful character – very knowledgeable about the meat industry, in fact there was probably no one in New Zealand that knew much more about the buying and selling of meat than Les Fisher. And he had the most wonderful meticulously neat handwriting. And he’d turn up his diary every now and again if you were in the office, and look up something, and you know, you’d need a magnifying glass to see it. And he’d get about three lines between two lines on a normal diary page, and the detail was absolutely magnificent. Les was a very kindly person – loved children. Unfortunately he and his wife didn’t have any children themselves. And he used to run junior swimming competitions and all those sort of things for years and years. But I remember once at the competition, my … Carl’s wife [?] – she was standing on the edge of the pool and I think she was about three or something – she was certainly under five. And Sue said to Les Fisher, “she doesn’t know how to dive.” And he said “She’ll soon learn!” [Chuckle] And the gun went off and she dived in [chuckle] as if she’d done it all her life.
But Les Fisher had one rule and we all knew it … everybody knew it … that you never ever rang him after work hours. And rightly so, too.
Mr Wylie – he became chairman after Howard Glazebrook in 1956. Mr Glazebrook became chairman in 1951. But Mr Wylie was General Manager of Napier Power Board, or Hawke’s Bay Power Board, and a pretty able man. But he was concerned about the capital structure of Richmonds, so his main thrust during his seven years was to stabilise the financial side of Richmonds. And of course it was then that Richmonds became an unlisted private company … in other words it could list on the secondary board. Mr Wylie was very conscious of the fact that Richmonds was really a farmer-oriented company, and he sought to get somebody that he thought could have the high profile and would lead Richmonds forward. So he asked Peter Plummer to join the Board which he did. And we all know that Peter Plummer had a very strong background in farmer politics, and he was also very knowledgeable about all aspects of farming and the meat industry.
During the 1960s pressure was marking for space, particularly in cattle. And Richmonds were very aware of the fact that they couldn’t get cattle at Tomoana, and they could only get a limited number killed at Whakatu, and so pressure was really on for a killing plant of their own. John Buxton joined the Board in 1964 – age thirty-one, a Lincoln graduate and quite a useful All Black. And he was appointed as assistant to Les Fisher, and was also charged with the job of preparing a case to put before the Meat Authority for Richmonds to get a beef killing plant of its own. So this brought about the birth of Pacific Freezing. It came about in an interesting way – John Ormond was then Chairman of the New Zealand Meat Producers Board, and as luck would have it he was a close friend of Peter Plummer too. Dawn Meat were very interested in getting a cattle slaughtering licence as well, but they had the upper hand. They already had an export licence that they had got through Walkers, and so they were in a slightly stronger position than Richmonds, and they knew it. And it happened that Richmonds were looking for a site to put a slaughter house, and who should come along with a place to build Pacific Freezing out there – none other than Lew Harris. He said “I’ve got ninety acres down next door to Whakatu, and I’ll give you an option on that for as long as it takes you to get a licence, and we won’t talk about the price.” Les Fisher commented that was at a giveaway price, but more about that later. So Dawn and Richmonds both put in an application for a beef plant. And John Ormond said, “Go away and think about it – maybe the logical thing to do is to put in a joint application and you’ll possibly get it. Put in two and you won’t get either”. And so that’s what happened, and that’s how Pacific Freezing came about. And the name is really quite interesting too, because … Pacific Freezing – why? It was conjured up one night when Graeme Lowe and John Buxton, who were close friends – they’d both worked together down in Christchurch, Canterbury, came up with the idea of ‘Pacific’. And why Pacific? Because we’re on the border of the Pacific Ocean, and to get to New Zealand you come across the Pacific Ocean. And so that’s how the name came about.
Graeme Lowe hardly had had the licence granted when Richmonds received a letter from Graeme to say that Dawn wanted a sixty-forty split. [Chuckle] And Richmonds responded that it would be much more appropriate for two to one in Richmonds favour. [Chuckles] Anyway, fortunately good sense prevailed, and Richmonds wrote back to Graeme and said “we must blow this, we’re happy to take fifty”. And Graeme said “Same”. And so that’s how Pacific Freezing began.
Unfortunately for Richmonds, John Buxton hadn’t gone unnoticed by the Powers Group of London. And he went there in 1972, so John never saw the completion of Pacific Freezing, which was a pity. And he went over to London where he was for a number of years, and then he came back to New Zealand, but unfortunately he’s not at all well, and hasn’t been for many years. But he’s a very nice person, John, and Richmonds could’ve well done with him.
But all wasn’t lost – as so often happens when one door closes another one opens – and in walked Bill Webb, a very bright and breezy Lincoln graduate that [who] had worked for American power firms on the east coast, and also spent quite a number of years working for Swifts, so he knew the freezing industry and he knew the livestock industry. And Bill was duly appointed.
Bill had a great ability to relate to people and was possessed with abounding energy. Richmonds were indeed fortunate in the appointment of Bill at a very vital time because things could have really gone off the rails then. John Buxton and Graeme Lowe were friends and worked things out by consensus, but Bill went right up and confronted Graeme and they had some shocking barneys, and neither would back back [down]. And I remember at a Pacific meeting, Peter Plummer saying “Now, now – now, now, now, now – that’s enough.” [Laughter] But anyway, Bill was a great servant to Richmonds. Bill Webb was unhappy about the price suggested for the ninety acre lot, so he went to Mr Harris and he said, “I think you’re selling that property much too cheaply”, upon which Mr Lew Harris replied “I know what it is worth, and I know what I want”, and that was the end, and so Dawn of course got the fringe benefit of that too, because the land was bought between the two.
Pacific opened in 1974 and killed sixty-two thousand head in the first year. Bill Webb was always the man with a mission, and the little Richmonds’ office was beginning to run out of space a little bit and so he had his eye on the Heretaunga Dairy Company building down in Maraekakaho Rd, where Richmonds Meats were, and now I think it’s some other name on the thing. [Chuckles] He thought that it was a very suitable building, but he thought he’d better mention it to his good friend, Sir Lew Harris, as well. And so he mentioned it to Lew and he said “I’ll be over tomorrow – meet me down there.” And so they went down and they walked through the office part of the Dairy Company and had a look at it. Sir Lewis said “buy it boy – it’’ll never be cheaper”. But Bill said “we can’t afford to.” [Chuckle] “’Course you can,“ he said. And he had Thomas Cross with him – Thomas was a new boy on the Richmonds Board and he’d brought Thomas along too, because Sir Lewis had nominated Tom for the Board, and they were great friends. And so he said “of course you can,” he said “I’ll put a hundred thousand into it”. And Thomas said “I’ll put fifty thousand into it”, and Bill said “Well, I think Richmonds can afford thirty thousand”. [Chuckles] That’s how that office block down there was bought. And as many of you know it also became the wholesale department and also the retail, and the shop out the front was built on a little later on.
Pacific Leathers, that big tannery over [in] Napier that was built in the early seventies and was built by two men from America – two brothers by the name of Joseph and Elijah Cyrus. And they had a crusting leather business in Boston. And they bought that because they wanted to take lamb pelts to the first stage in New Zealand and then ship them over to their plant in Boston and crust the leather over there. They also had as a partner Raymond Dale Wool, and the principal of that was Peter McDermott. Anyway, they couldn’t handle the unions in New Zealand by comparison with America, and they were hopelessly behind with their orders and the money was just going one way. They owed Richmonds over a hundred thousand for pelts that they had supplied, and they couldn’t see any way out of it so they offered their share to Richmonds.
Bill Webb in the meantime, had popped over to Australia to see what you could do with a tannery, and he came back and he said “They’re running tanneries very successfully over in Australia, wet-gluing bovine hides – that’s what we should do”. Cyrus Brothers weren’t happy, and they sold out the Richmonds half, and Raymond Dale Wool felt that they didn’t want to go into bovine because their whole business was around crusted leather and things. And so they eventually sold to Richmonds, and that is how Pacific Leather came into the possession of Richmonds.
In March 1977 when Peter Plummer and Bill Webb were away at a Meat conference, the Secretary of Richmonds got a call from Bruce Judge in Wellington, saying that Brierley’s wanted to buy ninety thousand shares, and that he’d be in the office later that afternoon. But of course the way that some of those firms operate, they’d possibly even started buying shares before then. It was a bit of panic stations as you can imagine. Bill Webb and Peter Plummer were up in Northland somewhere, but they were back that night, cutting their conference short. And Peter called for a Board meeting the next morning and invited Bruce Judge to come along and find out what it was all about. It happened to be at a time when the Government regulations prohibited increasing dividends and prohibiting bonus issues, and it was well known that Richmond’s shares were very undervalued, but nothing could be done about it. And so it was a pretty difficult thing to overcome as far as Richmonds were concerned, because until regulations lifted they couldn’t do anything. But on the other hand it was very advantageous for Brierley’s to do, ‘cause the chances are that they’d get a lot of shares, be able to take control of the company, and cash it up. Anyway, there was a lot of toing and froing, and within a few days Peter Plummer and Bill Webb went to Wellington. There’s an arm in the Reserve Bank – it’s called Distributions and Directors Fees Appeal Committee in Wellington, and it’s an arm of the Reserve Bank. And they went down and called on these gentlemen, and they listened very attentively but the answer was “no – we don’t wish to create a precedent”, even though they realised that Richmonds would have to offer Dawn meats their half share in Pacific Freezing, which would virtually cut Richmonds right arm off as far as beef was concerned. So Peter Plummer wasn’t going to have any of this and he said, “I demand to see the Minister of Finance immediately!” And so these gentlemen at the Reserve Bank left the room; discussed it and came back and said “We’ve reconsidered your application for bonus issue, we will waive it because of the special circumstances”. So that put that in place.
The next thing was that there was a general meeting called, and I thought Peter Plummer was absolutely brilliant at this meeting – he was strong and decisive, and called upon all his experience. He was very pleasant to Bruce Judge, but he obviously had the experience to be able to put him slightly on the sidelines. Bruce Judge got up with all his eloquence, and tried to persuade people to sell their shares, and what a good deal it would be getting about three times the value for their shares than what they were worth at the present time, and all this palaver. I was absolutely fascinated, because I was the new boy on the Board, and all this was pretty heavy stuff. But I can assure you that in a very short time I learned more about the company through the Brierley affair than I would’ve in the next ten years.
Anyway, during this meeting things were dragging on a little bit, and the man that you would expect quietly got to his feet and towered over Bruce Judge – Bruce was quite a slim young man in those days and had been a New Zealand hockey rep. Lew Harris was up about here somewhere, and he looked down at him and he said “Go back to your concrete jungle in Wellington – you’re not wanted here”. And he went on to say “I will buy back and give you a ten per cent premium on all the shares that you’ve bought.” That wasn’t quite the end of the meeting – there was a lot of toing and froing, but finally, thanks to Andrew Morrison who was our solicitor … many of you would’ve known Andrew Morrison from Sainsbury, Logan & Williams … Andrew had redrawn the Articles only a few years before, and it was virtually impossible for Brierley’s to retain these shares because they couldn’t get them transferred. And he further tightened up the drum a bit, and so they did sell them back to Lew Harris. And Andrew did put in the Conditions of Settlement stating that they could never attack … or any of their subsidiaries could never attack Richmonds again. And so that was the end of the matter, but it did make me realise at the time that in spite of the carrot – and a very good carrot – how important it is to have loyalty in any company, especially amongst your shareholders.
The next thing that came along was the fact that so many people wanted to kill their stock with Richmonds, but Richmonds just simply couldn’t accommodate it. And so it was obvious that sooner or later Richmonds had to have their own sheep plant. Once again we were told that the only opportunity we had was with a joint application with Dawn because Dawn was of a similar mind. And a very good property up at Oringi was sought out. It used to be part of the Knight Estate, and it was absolutely ideal, because it had fee-draining soil and adequate water and everything. And so that was purchased in anticipation that [chuckle] we would get a licence.
Well, the lengthy meetings were held in front if the Meat Authority in Wellington; they went on interminably. And in the end the answer was a lemon, and so we went back and licked our wounds and thought that perhaps we could do things a little bit better, and so beefed up the submissions a little and the personnel. And the Pacific team was Plummer, Webb and Morrison from Richmonds; Lowe, Foster and Rodney Gallen, who later became [a] Judge, for Dawn. And innumerable witnesses were called and the answer came up again – and I may add that the Hawke’s Bay Farmers Meat Company, Whakatu, in spite of the large plant at Whakatu, also went for a licence to build Takapau. But they were smart, because they revised their submission from the first one. They said “we will build a plant at Takapau and we’ll only put one chain in, and we’ll put the other chains in in Gear Meat, down in Wellington, [a] company that they then had. And they were granted a licence; Richmonds were turned down.
So what do you do now? Having been fobbed off twice, you can imagine Graeme Lowe wasn’t going to lie down, and Bill Webb was not much of a unit then – he was ailing badly. But the decision was made to try and get the Act in Parliament changed, so a letter was sent off to the PM, who happened to be Prime Minister Muldoon. Duncan MacIntyre, who was Member for Hastings but also Minister of Agriculture, was heavily lobbied from every direction until I don’t think he knew whether he was coming or going. And John Falloon, who was a new Member of Parliament for Pahiatua, but fortunately Oringi was in his electorate. He was very pro-Oringi because he knew that Waingawa was on its last legs, and that Oringi would sit very well into his electorate. We knew that we had an ally in Ruth Richardson who wasn’t then in Parliament, but she was legal adviser to Federated Farmers, and she was a very forceful young woman, and anything to do with de-regulation she was at the forefront of. And she made certain that Federated Farmers were sufficiently briefed so that they wouldn’t make noises about what was going to happen to their farmer-owned Works. And she took care of that one – she took care of it very well.
The legislation wasn’t going very well, and Labour were attacking it from every direction, particularly Mike Moore. John Falloon sensed this, and he called for Richmonds and Dawn to have a meeting with the PM. On the day of that meeting a raging storm was over Wellington, and I happened to be at the airport in Napier, wondering whether or not [I’d] get there in time, when all of a sudden the GM from Pacific Leather turned up and said “get in the car quickly, I’m taking you to Hastings – you’re driving.” Oh my God! Three and a bit hours. And John Foster was behind the wheel when I arrived in Hastings and Graeme Lowe was sitting in the front, and the engine was going, so I knew we were going to have a quick take off. [Chuckles] Anyway, away we went – we had three hours in which to get to Parliament Buildings on a bad, windy day. John drove; Graeme held a radar detector up in the top left corner; [laughter] I didn’t know which side of the back seat to sit, and so in the end I sat behind Graeme and strapped myself in, and kept very quiet. [Chuckle] And we literally bounced every [chuckle] now and again, but we got there on time. I often wondered why Peter Plummer had sent me down to that meeting, because he was available. But the wise old chairman didn’t always have the happiest of relations with Muldoon – they’d clashed a few times over different things. And so Peter told me years later – I said “why did you send me down to such an important meeting as that?” He said “I thought if I went it would jeopardise our chances.” And so that was the wisdom of PSP – he was [a] great chairman.
Anyway, when we arrived at Parliament Buildings we were relieved to know that Muldoon had also been held up in that storm and couldn’t get in to Wellington, and so he was running twenty minutes late. And Ben Couch, who was Member for Wairarapa – he joined us for a cup of coffee. And he said “I don’t know too much about this delicensing business, what’s going to happen to Waingawa?” And we said “well, can’t help you there – we can’t help you about any other freezing works – they’ll have to you know, do what they can for themselves.” Well, as we all know Waingawa was in its last throes of death, and closed shortly afterwards.
Mr Muldoon came straight to the point and he said “I’ve just had the other blokes in and they have told me the other side of the story. Who am I to believe?” Then he said “In all honesty, I’m worried about the Meat Amendment Bill. I’m worried the meat companies are going to use it as an excuse to close their plants, throw people out of work, then blame the Government. What can you say to help me?” I thought that was a wonderful introduction by Mr Muldoon, because as we all know he can be pretty gruff and rough, but he was showing a balance to this argument, and he was looking to us to help him make judgement. Anyway, Graeme thought that he would … naturally he should open up, he got about twenty seconds into what he thought was a reply … an answer, and Muldoon barked at him “You’ve changed tents and lost me. Start again!” [Chuckles] Poor old Graeme! I don’t think that had happened to Graeme before! [Chuckles] Anyway, as [was] to be expected, the inimitable Foster stepped in, and he righted the ship. John was a very quick thinker and had a very retentive brain – in fact he could so easily have been a wonderful politician, he always could think on his feet so well. Muldoon then asked us a lot of searching questions, and he asked me about [the] sheep population of Hawke’s Bay; capacity and killing numbers, and all those sort of things which fortunately we had a bit of an idea of. And he then looked at John and said “Is that the case?” And John said “Yes sir – yes. What Mr Logan said was quite correct.” “Do the meat authority know? Does my Ministry know these figures?” And John said “Yes, sir – they’re aware of it. “Well why haven’t I been told? Why hasn’t it been on my desk?” And so someone had slipped up in not running it past him.
Anyway, we left after that more to the point, and a few more questions perhaps. And John Falloon told us later that the meeting with the PM was a pivotal factor in his deciding to continue to change the Meat Act, so it was worthwhile. That Meat Act was passed in December 1980 to delicense the meat industry – a significant Act I may add, and a significant date. It was the eleventh of December, and the view is widely held that the delicensing of the meat industry was the catalyst for the massive deregulation that took place in the 1980s. So in the end, Dawn and Richmond’s persistence benefitted the whole country, and really has a place in history.
Oringi was started almost the next day. [Chuckle] As you can you imagine, Graeme was quickly on the job, and was built in eleven months. Takapau, on the other hand, had started … given us a total year’s head start. Oringi was built for $20 million, give or take a few, and Takapau was very nearly double that.
Mick Groom, Chairman of Hawke’s Bay Farmers’ Meat Company, once remarked to Graeme: “You are shaking your plant to pieces, you have it so wound up. How long do you expect it to last?” Graeme said “oh, about twenty years, or maybe a little better.” Now that absolutely floored Mick – he said “We build ours to last for a hundred and fifty years!” And I believe that that really depicts the philosophy between the two companies – you know, Richmond and Dawn, and the established companies. And they built massive cool stores, and you can still see them down there, whereas Richmonds and Dawn only built cool stores large enough to handle the immediate kill. And if space had to be rented for a short time because of loading out or anything like that … problems … it was done, but you didn’t have all that capital tied up in these massive buildings. And anyway, your banks were much happier if you’ve sold up because if you’re in this type of business you’ve got to keep on selling – you can’t pause.
Oringi started off with a very bumpy ride, and it was, as you can understand, all about unions. The PM, Muldoon, opened it and there were seven hundred guests there, and before he had time to speak, the Vice President of the Union at Oringi was on his feet. And this is what he said: “We want to work five days a week for five days’ pay without outside interference. We will become members of the Meat Workers Union, but we will control our own destiny.” Muldoon was very sympathetic to that, and of course the election was just round the corner, and that stayed on the back burner. So gradually these very conscientious people, a lot of them farmers and farm workers and hard core meat workers, gradually got chopped off, and they lost their jobs and the hard core came in. Union demands were huge, they wanted five days’ pay for four days’ work, and they put that down to technology. They also wanted to have a say in who was hired and fired, and what they received. So it was a very hard ask.
Anyway I think that’s enough – I’d just like to say a few words about Bill Webb, who died in 1981. In his eight years he oversaw the building of Pacific Freezing plant; Pacific Leathers; the Brierley affair; two hearings for the sheep licence, and part of delicensing; moving the head office; wholesale meat division; and retail division. I think that’s a huge achievement for him to’ve been able to do in the space of eight years. He was succeeded by Rowan Ogg, a bright eyed, thirty-two year old Massey University graduate, and he was there for six years. I became Chairman in 1982, so there were two new boys on the block, and people thought that we’d be an easy pushover for Dawn, but [that] didn’t prove to be the case, and both companies I think prospered, because we had developed mutual respect for one another.
The next few years were devoted to consolidating … finding new markets. In 1982 the slump in lamb prices forced the Meat Board to acquire all meat, not bovine – all sheep meat, which they had for three years. But they lost an enormous amount of producer funds in doing it. Most companies resisted this but Richmonds being a public company, I felt that it was very much Richmonds duty to play ball with the Meat Board because after all, the shareholders would suffer. They didn’t, and it proved to be the right thing because Richmonds got a lot of very good contracts during the three years’ embargo, and a lot of those flowed on into latter years.
1985 – Richmonds won the top award for lamb presentation at the Anuga Food Fair in Cologne. Inflated sheep numbers due to the SMPs were on the way down, and also the category of farming was changing – sheep to deer, sheep to cattle, farming land to grapes, apples, and the hamburger business was flourishing in America, so it was inevitable that sheep numbers were going down; there was now excess capacity for killing. Richmonds and Dawn sensed that they were vulnerable by comparison with their main competitors in the North Island, namely Waitaki NZR, Weddel, Vestey’s and Affco. Some rationalisation had already taken place, or it was beginning. This was in 1956. Borthwick’s sold out to Waitaki NZR; Vestey’s and Crown merged to form Weddel Crown; Wattie took fifty-one per cent of Waitaki. Wattie had already bought into HBMC, [Hawke’s Bay Meat Company] twenty per cent. Richmonds produced eight tons of baby sausages a day for Wattie’s, and Goodman’s, who now owned Wattie’s, felt that they wanted a bit of Richmonds. And so we were summonsed to Goodman’s office in Wellington, and Peter Shirtcliffe was CEO. He said that Goodman’s would like to take a shareholding in Richmonds, and Foster and I said “Under what conditions?” And he said, “Twenty per cent to begin with, and a full takeover in three years.” So we said that that wasn’t on – there could be other ways of doing it. He said “No!” Whereupon he went out, and Goodman’s bought into Waitaki and they took over Waitaki. So that’s how things were moving at that time.
At the same time Dawn and Richmonds were competing. The cake was getting smaller. The Alison Brothers, who owned fifty per cent of Dawn, wanted to exit the industry, and so it was worked out by Sir John Anderson from South Pacific Merchant Finance, a deal whereby Richmonds took over Dawn … Walkers. And that was agreed by both parties, very reluctantly I may add, by Graeme Lowe, because he didn’t want to sell out, and I don’t blame him. Walkers was valued at $30 million, which Richmonds had a little bit of difficulty in reconciling with. It had been valued on the back of an extremely profitable year. And in the end it didn’t really matter because Graeme Lowe was under considerable pressure from his family not to exit out of everything, and late one Sunday night he arrived out at my place with his good friend and lawyer, Stuart Devine. I could see that Graeme was under a heck of a lot of pressure, and I felt for him. I listened to what Devine had to say – in other words, they wanted to retain Walkers, and I told him that Richmonds would have a Board meeting first thing tomorrow morning, and then discuss the matter with the Alisons and I’d get back to him. As it so happened that the Alison boys were reluctant to release it from the contract. The contract hadn’t been signed, but at the same time they felt that the intent was there and they were reluctant to release it. Richmonds persuaded the Alison boys that they were quite comfortable if Graeme Lowe did retain Walkers and so that was taken out of the contract, and Richmonds took over all the Dawn Meat assets – both cattle, sheep – everything.
John Anderson had been working hard with Weddel and Waitaki as well, and he’d worked out a deal with those companies whereby they would combine with Richmonds, and three plants would be shut. Richmonds would take over Hawke’s Bay Farmers’ Meat Company; the Waitaki plant at Feilding would be closed, and Advance Meats in Gisborne would be closed. The costs of closure would be on a pro-rata basis. And that all seemed to be going very well, and he wanted to do that concurrently with Richmonds taking over the Dawn assets.
This of course, as you can imagine, put a huge strain on Richmonds, because overnight they were to grow by four hundred per cent, and that put huge strain on financial resources. It was all planned to be done in the proper way – in other words, going and meeting the Whakatu Board and explaining what was going to happen, and when it was going to happen and everything like that. But the day that Rowan Ogg and I were holding a press conference to announce the purchase of Dawn Meats, Rowan’s secretary came in and put a note in front of me to say that Peter Roebuck was waiting outside with a takeover offer for Richmonds. Peter Roebuck was CEO of Eastern Deer, and Selwyn Cushing was Chairman. I had a pretty fair idea that it was delaying tactics – that they had heard something of what was going on. The press also sensed there was something wrong, and instead of poor old Graeme getting recognition for all that he had done for the meat industry in Hawke’s Bay, his name was hardly in the paper the next day, because Barry Brill, who was Public Relations Officer for Waitaki, panicked and went public. He went public about six o’clock that night, and blew what was going on and what was happening, because Eastern Deer were raiding the Whakatu share register – they’d already bought a lot of shares. And I don’t know if he consulted with Peter Johnson, who was CEO of Weddels, or Athol Hutton who was Waitaki, but he certainly never said a thing to Richmonds.
And I felt it very much … very personally, because the Whakatu workforce … there were a lot of people that I knew, and knew the families, both in Executive and in workforce, and here they were, thrown out of work without a moment’s notice. And so that was the Whakatu thing – I think we’d better end there.
Michael: Thank you, Hamilton.
Original digital file
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BusinessW Richmond Limited (Richmonds)
Landmarks Talk 18/5/2010
- Hamilton Stopford Logan
- William Richmond