Robert Long Mostyn, one of the founders of the Craig Mostyn Group, did two farsighted things that set the business up for success, both of which were pretty tough on his son Bob, and he did one thing that held it back (he stayed on too long).
The first thing RL did was to write into the constitution that the business had to have a majority of non-family directors, and when he eventually retired in 1975 he appointed a non-family CEO to take his place, rather than his then 46-year-old son.
The second thing was to provide in his will that the third generation would inherit the business, not the second.
Maybe he just did all this, and hung on as chairman and CEO until he was 79, because he didn’t think much of his son Bob, although that’s not part of the family folklore now: Bob Mostyn, now 84, is as revered as his father.
But whatever the case, Craig Mostyn Group is now a sprawling $320 million a year WA-based food business with 80,000 pigs in five farms, Australia’s biggest lobster and abalone export operation into Asia and an $80 million a year meat recycling business. The shareholders are 14 descendants of RL Mostyn and only one of them is in the business.
George Craig and RL Mostyn started the business in 1937 in Sydney as a trading company, importing and exporting anything they could put their hands on.
George was a smoker as well as being tight with money: he used only one match a day, lighting each subsequent cigarette off the stub of the previous one, from the moment he got up in the morning until he went to bed at night. No surprise, then, that he collapsed of a heart attack and died aged 41 in 1940, whereupon RL bought out his share of the business the next day and moved into George’s bigger office.
His grandson, Andrew Mostyn, is the last Mostyn in the business – he is both a shareholder and director of the company and manager of Corporate Social Responsibility and Credit Control, reporting to CEO David Lock. When they have a board meeting, David reports to Andrew.
Andrew says he was assistant CEO when his father was the boss, but he never intended to be CEO himself.
Bob took over as CEO in 1986, eight years after his father died, and he did actually inherit 30 per cent of the company because in 2000 the family broke the trust that was meant to pass straight to the third generation, so that Bob and his two sisters Jeanne and Roddie (Rodrica) took control, with the consent of their kids.
With RL no doubt spinning in his grave, his three children gave each of their own eight kids – the third generation – about 5 per cent each took the other 60 per cent themselves. They then wrote a new provision into the constitution that no one branch of the family could own more than 49 per cent without making a full takeover offer, along with strict pre-emptive rights. Big decisions, like the sale of the business or an acquisition worth more than 50 per cent of the assets, require unanimous approval of all three branches of the family.
They also wrote in a provision that staff and directors had to retire at 72 to make sure no one else stayed too long like RL did. RL Mostyn is one patriarch who did not rule from the grave.
Jeanne Morrison and Roddie Keyte have now passed away but Bob is still with us, having retired as chairman at 72. The chairman now is Jim Kennedy, who has had a long career in the food business and, among other things, was the inaugural “National Export Hero” (we don’t seem to have them any more).
The Mostyns, Bob, Andrew and his two brothers, are now at the 49 per cent limit following a buyback a few years ago to provide some family members with liquidity, but they have no intention of going further and making a full bid.
The fourth generation of the Mostyns, Keyetes and Morrisons are now in and around their 20s, but at this stage none is in the business and none looks like wanting to be: they are happy being shareholders and receiving the dividends. Most of them live in Sydney, across the country from the company’s head office in Fremantle, and they meet as owners twice a year.
Meanwhile the business is still growing, as well as paying good dividends, and recently bought Australian Seafood Exports in Tasmania for cash (not borrowed), adding to the lobster and abalone export business.
It used to have 17 divisions, but has gradually been simplified to three: meat and livestock (basically, pigs); meat recycling, which produces meat and bone meal, tallow and feather meal; and seafood import and export.
If it were listed, Craig Mostyn Group would be in the ASX 200 index and would probably be getting fought over like Warrnambool Cheese and Butter, because exporting food to Asia is the in thing these days.
As it is, it’s locked up and looks certain to pass to the fourth generation of RL’s descendants. And the old man has probably stopped spinning in his grave.