Major farming group Dairy Holdings is selling five farms developed in the 1990s by a farmer who pushed boundaries too far. By Anne Hardie.

Dairy Holdings is selling nearly 3000 hectares of dairy farms near the top of the South Island which were all converted by entrepreneur Avon Gillespie, who changed the face of the Maruia Valley to dairying.

In the late 1990s, Gillespie was a star in the dairy industry – a champion sharemilker – on a farm in the Tutaki Valley near Murchison. In just a few years he converted six large-scale dairy farms between the Tutaki and Springs Junction that each milked between 1000 and 1700 cows.

More farms were owned or leased around Murchison and Westport in his farming enterprises that milked about 10,000 cows before it all went sour. By the end of 2006, eight farming companies that he co-directed were in receivership, owing the Bank of New Zealand about $37.5 million.

He was on a downhill spiral that went beyond financial woes, with crimes involving drugs, violence and weapons sending him to prison and also fraud after he created a fictitious herd to gain more funding.

Despite his spectacular fall from grace, Dairy Holdings’ chief executive, Colin Glass, says Gillespie was generally remembered as a likeable rogue who wasn’t scared to push the boundaries.

Dairy Holdings, the largest milk supplier and shareholder of Fonterra, bought six of Gillespie’s dairy farms in 2005 when the companies had gone into receivership and he was still in charge of the farms.

The company’s initial contact with Gillespie was in his helicopter, perusing the farms from the air. Alongside a multitude of farms, Gillespie owned the helicopter business, a farm machinery business in Richmond, a limeworks and a Murchison hotel. The businesses were operated through various companies, partnerships and trusts known collectively as the Gillespie Group.

“When we first looked at the farms, he flew us over by chopper and we very quickly realised he had a finger in a lot of pies. He was a very clever man and it all ran away with him a bit. But it was amazing what he put together in a short period of time and when we see what we have, we are very grateful.”

Glass says Gillespie managed to curry favour with the bank and he was very aggressive with buying land to create larger parcels that he then converted to large-scale dairy units. A few small dairy farms with walk-through dairies became part of the larger units. Each unit was converted to a high standard with rotary dairies, good laneways and drainage. Some blocks were leased around freehold land to create larger milking platforms.

“It hadn’t happened on that scale in that area – he was a pioneer.”

The conversions in the Maruia Valley took on the names of Morecow1, Morecow2, Morecow 3, as well as Shingle Creek and one based around Gillespie’s original family farm, Frog Flat. Those names continue under Dairy Holdings’ ownership.

Glass says the numerous pieces of leased land made it difficult to know what was freehold and what was leased, which was part of the enigma of Gillespie’s growth in dairying. Likewise, there was stock leased from various farmers which added to the confusion.

He says the local story was Gillespie had a “run-in” with the bank, which led to the companies going into receivership.

However, receivership was the least of his problems. Drugs, violence and firearms were involved including possession of pseudoephedrine with intent to make the drug P. Gillespie was sentenced to four-and-a-half years in prison on those charges, with fraud charges adding another two-and-a-half years. At the time the Serious Fraud Office’s case was that Gillespie had applied funds for his own personal expenses and to pay creditors not approved by the BNZ.

Glass says there were stories of machinery hidden in the bush from Gillespie’s Richmond machinery business that had also gone into receivership. Even after Gillespie was convicted, the farms had people calling in to see if they could find items that had disappeared.

Meanwhile, Dairy Holdings took over ownership of the six large-scale dairy units, adding more houses, calf-rearing facilities, upgrading drainage and putting irrigation on four of the farms.

The Tutaki Valley farm was sold about a decade ago because of its isolated location, whereas the remaining five lie relatively close together along the valley between Maruia and Springs Junction.

Today, the farms milk a similar number of cows to Gillespie’s time on the farms. The total land area of the five farms is nearly 3000ha and 1713ha is effective. In the 2022 season, the farms milked 3570 cows and the average total production for the past 16 years is 1,006,283kg milksolids.

Glass says cow numbers haven’t changed much over the years, but instead of wintering them elsewhere as Gillespie did in the past, they are now wintered on the farms which removes winter-grazing costs. Dairy Holdings has focused on running the farms as low-cost, fully self-contained seasonal supply operations.

The remote location of the valley, distant from the company’s other farming enterprises, has prompted Dairy Holdings to put the properties on the market and concentrate on its other properties around the South Island. Glass says there has been interest in the farms which could be bought together – though he admits that is a big ask – or as individual farms.

He says Gillespie never really recovered from his fall from grace and time in prison. Gillespie died in Reefton in 2020 at the age of 57.