The Smorgon family: from smallgoods to steel and a rare exit

Most Australian business dynasties end the way most marriages end badly: in a courtroom, or in a newspaper column written by someone who's clearly been fed a version of events by one side. The Smorgons are the exception that makes the rule look worse by comparison. When the Smorgon family finally dismantled the sprawling industrial empire they'd spent three generations building, they did it deliberately, methodically, and largely without the public bloodletting that has defined so many of the families this site writes about. It's a genuinely good story, and so unusual in the annals of Australian family capitalism that it almost reads like fiction.

It isn't. The Smorgon story starts, as so many great Australian business stories do, with almost nothing.

From a shtetl in Ukraine to Carlton's meatworks

Norman Smorgon, later known as Norman Smorgon Snr, and his family arrived in Australia in the early 1920s, part of the wave of Jewish migration out of Eastern Europe in the years either side of the First World War. It was the patriarch and his sons who built the business proper, with the founding generation arriving in Melbourne with the kind of capital that fits in a suitcase. They set up in the meat trade, an unglamorous but essential business in a city that was, in the interwar years, still substantially built on livestock, wool and the sheds that processed both.

The family's early ventures centred on smallgoods and meat processing in Melbourne's inner suburbs, the kind of grinding, low-margin, high-volume trade that rewards discipline over flair. This is precisely the kind of business most fortunes don't survive on. Smallgoods don't scale the way mining or property do. What they do is teach a family how to run tight books, manage cash flow through thin margins, and treat every employee relationship as a long game rather than a transaction. That discipline, I'd argue, is the single most underrated ingredient in the entire Smorgon story, and more important in the end than any individual deal.

The move into steel and the birth of an industrial empire

The pivot from meat to metal is the part of the story most people remember, if they remember any of it at all. In the years after the Second World War, the family's business interests expanded into steel distribution and processing, eventually consolidating under the Smorgon Consolidated Industries banner. This wasn't a single lightning-bolt decision so much as a series of adjacent bets: into steel, into glass through what became Australian Consolidated Industries connections, into packaging, into paper. Each move built on cash generated by the last, and each generation of Smorgons who came into the business (and there were a lot of them, this was never a company run by one man and his shadow) took on a specific operational patch rather than jostling for a single throne.

That's a structural point worth sitting with. Compare it to the Myer family's retail empire, or the generations-long tussle inside the Packer dynasty over who actually ran things, a contest whose mechanics are covered in The Packers: three generations of Australian power, money and gamble. The Smorgons instead ran something closer to a federation. Different branches of the family took responsibility for different divisions, steel here, packaging there, finance somewhere else, and by most accounts the family's various councils and meetings functioned more like a well-run private partnership than a monarchy with an anxious line of succession.

Growing quietly while others made noise

By the 1980s, Smorgon Consolidated Industries was one of the largest private industrial groups in the country, with interests spanning steel processing and distribution, packaging, paper products and glass. It rarely generated the kind of headlines that trailed Alan Bond or the young Kerry Packer around Sydney's press gallery. The Smorgons weren't buying airlines or fighting for control of television licences. They were making things: steel coil, glass containers, packaging board. These are the unglamorous inputs that every other Australian industry depends on and nobody thinks about until the supply chain breaks.

Here I'll offer a genuinely contrarian view, one I don't think gets said enough in the business press: the quiet, unglamorous industrial fortunes of this country have generally outperformed the flashy ones on a risk-adjusted basis over the long run, and the Smorgons are exhibit A. No 1980s corporate raid gone wrong, no property portfolio wiped out in a downturn, no reliance on a single celebrity founder whose ego eventually outran the balance sheet. Just steel, glass and paper, decade after decade, run by people who treated the business as custodianship rather than a stage.

How the Smorgon family split in 1994 without a disaster

By the early 1990s, the family group had grown large and complicated enough, with multiple branches, multiple generations and multiple sets of ambitions, that a single unified structure was becoming unwieldy. In 1994 the various family interests were divided among the different branches, with each taking control of specific businesses rather than continuing to share a single umbrella entity. It's the moment in almost every family dynasty's life where things go feral: think of the generational contests that have played out inside mining fortunes, or the kind of boardroom manoeuvring that shaped the modern Hancock story, covered in some detail in The Hancock dynasty: iron ore, the Pilbara and the fortune Gina Rinehart rebuilt.

The Smorgon split, by contrast, was negotiated rather than litigated. Each branch of the family walked away with a going concern rather than a grievance. That's not nothing. Family business researchers and succession advisers will tell you that the overwhelming majority of multi-generational family businesses fail to survive an orderly transition past the third generation. The oft-cited "shirtsleeves to shirtsleeves in three generations" line has enough empirical backing in Australian and international family business research that it's become a cliché for good reason. The Smorgons didn't just survive the transition. They arguably improved on it, by choosing to unwind on their own schedule rather than waiting to be forced. When a split does turn ugly, it tends to end up before a court such as the Federal Court of Australia, which is exactly where this one never went.

Winding up on their own terms

What happened over the following decade and a half is, I think, the most instructive part of the whole story and the part that gets the least attention. Various Smorgon-controlled businesses were progressively sold, restructured or floated rather than held onto out of sentiment or dynastic pride. Steel processing and distribution interests were consolidated and eventually sold into what became larger listed steel groups; other divisions were divested to trade buyers or private equity as it suited the family's own timetable rather than a market's.

This is, frankly, the bit that separates the Smorgons from almost every other dynasty on this masthead's beat. Most families cling. They hold the family name on the letterhead well past the point where the operating logic makes sense, because letting go feels like admitting the founder's project has run its course. The Smorgons treated the business as a vehicle for wealth and stewardship, not as a monument. When the economics said sell, various branches sold. When it made sense to consolidate into fewer, more focused entities, they did that too. There's a lesson in there for family offices well beyond Melbourne's steel and glass trades, and it's one I don't think gets taught in business schools nearly as often as the more dramatic collapse stories do.

What's left, and what it says about the Melbourne Jewish business community

The Smorgon name today survives mostly in philanthropy, in the family's long and substantial record of giving to Jewish community institutions, medical research and the arts in Melbourne, and in the occasional plaque or building name that most people walk past without a second glance. Various family members remain active in business and investment, typically through private family offices rather than a single consolidated public entity, a far cry from the days when Smorgon Consolidated Industries was a genuine industrial heavyweight.

I'd put the Smorgons alongside the Myer family as one of the two great counter-examples to the standard Australian dynasty script, the one that usually ends in a Federal Court judgment or a tabloid front page. The Myers' own long, comparatively graceful transition from pedlar's cart to department store empire is told in The Myer dynasty: a Bendigo pedlar's cart and the store that became Melbourne, and the parallels are worth drawing out: both families built on unglamorous, high-discipline foundations, both spread responsibility across generations rather than concentrating it in one heir, and both eventually chose to change shape rather than fight to keep an outdated structure intact.

Whether that discipline survives another generation of Smorgons, spread now across separate family offices and separate ambitions, isn't something I'd bet on with any confidence. Dynasties have a habit of un-learning their own founding lessons once the founders are gone. But as an object lesson in how to build an industrial fortune from a Carlton smallgoods shop, and then wind it up without a courtroom in sight, the Smorgon story remains close to unmatched.

For more on the families that built and occasionally broke Australian capitalism, the Tycoons & Dynasties hub has the rest of the ledger.