James Halliday AM Part 2
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James Halliday AM - Part 2
The son of wine-loving parents, James Halliday was born, it’s said, with Semillon running in his veins.
Raised and schooled in the self-same street in which he was born, he graduated in law from the University of Sydney in 1961, completing his education the following year in camping sites from Spain to Norway. Back home, and practicing law, he was introduced by a famous friend to the mysteries and marvels of the wines of France. Inspired to recreate them in the Hunter Valley – and humbled in the attempt – James came to the dismaying conclusion that nothing resembling his beloved Burgundies could ever be made anywhere in Australia. Then he tasted Pinot Noir from Yarra Valley...
WD: James, as epiphanies go, that was a fairly transformational one.
JH: Oh yes, it changed everything. The minute I tasted those wines, I absolutely knew that Yarra Valley was where I wanted to end up – somehow, some day.
WD: But it happened sooner rather than later, didn’t it?
JH: Yes, in a series of happy accidents, I suppose. In 1983, my law firm – which is a huge organisation these days, but was relatively small back then – wanted to open a Melbourne office. None of the other partners was prepared to go and do it – they called it going to Siberia. But that worked in my favour. The firm was so grateful that I was prepared to go and do it, that they agreed to all my conditions, and I got a step closer to where I really wanted to be.
WD: Conditions?
JH: I said that I’d give them five years – I was confident that I could build the business up in that time – but that after five years, I’d retire from law and do wine full-time. I also negotiated very generous holidays, so I had eight weeks every year that I could devote to wine.
WD: As in writing?
JH: As in making. I had hatched a plan to use those generous holidays to make wine.
WD: How does that work when you’re living in South Yarra?
JH: You purchase grapes, and use someone’s winery.
WD: Of course. Simples...
JH: I came to Melbourne in 1983, and by ‘85, I was ready. I acquired grapes from Yarra Valley, and processed them at the Elgee Park winery on the Mornington Peninsula. Living in Melbourne, there were always weekend trips to Mornington, or Yarra Valley. I became close friends with Bailey Carrodus at Yarra Yering and a few other wine people in the district, and I said to a couple of them, if any property becomes available, let me know. Not that I was in a position to purchase – it was more a ‘watching brief’ so I could keep an eye on property values...
An amicable, yet expensive divorce in the late 1970s had depleted James’ reserves.
JH: ... And then in ’85, one of my ‘moles’ let me know that an auction sign had gone up on a house in the area. I very quickly contacted the agent to find out what the vendors’ expectation was, and he said they’ll accept $250,000. Well, it was the weekend and I was down at Mornington with my very good friend Tony Jordan...
Dr Tony Jordan OAM (who passed away just a couple of years ago) was a leading Australian oenologist and wine consultant.
JH: ... and we agreed that we’d meet the agent at the house. It was a miserable day – pouring rain – and when Tony and I got to the property, there was no-one there. We sat in the car in the rain, thinking uncharitable thoughts about the agent, and then Tony says – ‘It couldn’t be that other house up on the hill, could it?’ I thought – for $250,000?? Dream on. But there was no point in not driving another 50 metres up the hill, and so we did, and there was the agent, and the auction sign, and the house. This house – where I’m sitting right now. I wrote out a cheque for $25,000 on the spot.
WD: Fate.
JH: That was the Sunday. The next morning, I got straight on the phone to the bank manager and said – ‘Listen, chum, I know I don't have an overdraft with you. I know there's nothing in place. But I've written a check for $25,000 – don't you dare bounce it.’
Evidently banking was conducted differently in the 1980s...
JH: They didn’t bounce it, and what’s more, I managed to borrow 130% of the purchase price, which allowed me to settle on the house, and put in the first stage of the vineyard. So, I made the ’86 and ’87 vintages here in the Yarra Valley, in a mate’s shed. It wasn’t until 1988 that I was able to build a winery here at the Coldstream Hills property. Of course, it's quadrupled – or more – in size from where it started.
WD: But you were still working for Clayton Utz in the city?
JH: Yes, the business was located in the Rialto building and then subsequently at Collins Place – two high-rises in Melbourne’s CBD – and you know, this house is so spectacularly situated that you could see those buildings from the veranda. You can’t now, because trees have grown in the foreground, but from here, I could see my workplace; and from the office in town, I could see the hills where the Yarra Valley was, and where – roughly speaking – the house was. So, it made me really itchy, as you can imagine, to get out of the office and back to the Valley.
WD: You were living a double life.
JH: It’s true. I remember when the Amphitheatre block needed pruning at the end of its first year of growth... I’d be pruning in the pre-dawn darkness – more or less feeling my way until it got light – working for two hours, then rushing up to the house to shower and get into my suit, and catch the train into Melbourne.
WD: A commuter!
JH: In fact, the train was wonderful, because Lilydale was the start of the line, so there was always a seat, and you could use the time to catch up on work or just read the paper. But I had committed to staying with the firm for five years, and so that’s what I did.
WD: Even so, you must have been looking forward to the end of that arrangement.
JH: Of course, but I was grateful for the income, because in fact, I was mortgaged to the hilt. There was the house, the vineyard, the new winery that we’d started building, and then, at the end of 1987, the house over the road – the one where Tony and I had sat waiting in the rain – came on to the market. I had always said that if it ever became available that I would have to buy it. And I did. It’s now the Coldstream Hills Cellar Door.
WD: So now you had all the pieces...?
JH: Yes, although it came at a price. I really didn’t have the money to buy the property, but I knew that it was the right thing for Coldstream Hills. I had three options to raise money: stay on as a partner at Clayton Utz; bring in silent partners; or raise on the stock exchange. I finally decided on the third option, with the intention of buying out the minor shareholders down the track. But by then, the 1990s were upon us, and they were not kind. There was a brief period in 1992 when bank interest rates went to 22% – it was a terrible, terrible time for small wineries in Australia. We were successful, and we were expanding, but it was a struggle just to keep afloat. We needed to raise more capital, which diluted our shareholding. Then, in 1996, Southcorp made an offer...
Southcorp Wines – previously Penfolds Wines Group – was acquired by Foster’s in 2005. Following a 2011 demerger, it was renamed Treasury Wine Estates.
JH: In the end, I had to decide whether to accept the offer, or get locked in as a minority shareholder – with all the attendant financial pressures. I decided to accept Southcorp’s offer
Next week, in James Part 3: A new era for Coldstream Hills, and a new role for James Halliday. PLUS how to write two books a year for 30 years, while simultaneously maintaining successful careers in two discrete fields.