The empire, which ranged from cattle ranching to wholesale butchering and the Dewhurst meat shops, was in crisis.
Tim Vestey, the 31-year-old great-grandson of the one of the founding brothers, was forced to concede that after more than 90 years of bringing beef to the British masses the Vesteys needed outside help.
Someone had to be found to become chief executive of Union International, the Vesteys' main holding company with an annual turnover of more than pounds 1bn.
Their choice, Terry Robinson, was a suprise. A 48-year-old Mancunian, Mr Robinson is a trained accountant who spent 11 years as a main board director of Lonrho, Tiny Rowland's international trading and minerals group.
Mr Robinson brought wide experience of operating in foreign countries and bringing order to a diffuse empire. He was known as a tough negotiator and deal maker.
But critics questioned whether he knew enough about property and the meat business, Union's two core problems.
A year later Union is not yet fully out of the wood. But Mr Robinson can point to a remarkable turnround in fortunes. The group, which made a loss of nearly pounds 20m in 1990 and more than pounds 100m - including extraordinany items of pounds 80m - in 1991, is now trading profitably.
Debt has been cut to just over pounds 200m and a deal was struck with bankers in November which allowed Union to defer most of its debt repayments as long as the group kept paying its interest bills.
Most important, Mr Robinson has brought order to a group which, like many family businesses, grew organically and deperately needed a structure. He bought in his own management team of three men and a woman, including a new finance director, Paul Taylor, also from Lonrho.
He also imported a consultant on the property side, Geoffrey Musson, who had been a manager at the Merchant Navy Officers Pension Fund. Finally he has taken an axe to costs, shedding more than half the head office staff at Smithfield in London at a saving of nearly pounds 10m a year.
Dewhurst, Britain's largest chain of butcher shops, posed the biggest problem. Losing large sums of money, many of the 1,265 shops served towns that were too small; other shops were too close to each other.
Mr Robinson decided that there needed to be a serious pruning. After a three-month review 700 shops were earmarked for closure. Despite the problems of trying to offload so many retail outlets in the depths of a recession, progess has been brisk.
Many are well-sited, and so far 338 have been sold with another 100 in the hands of solicitors pending a deal. The sale has raised pounds 20m for Union.
Mr Robinson has also got to grips with the property portfolio. The group had been a long-time player in the sector, converting its own disused abattoirs into retail or distribution sites.
It was good business, but in the mid-1980s the Vestey family looked out from its headquarters in Smithfield and saw the soaring rents in the City of London and thought that it could develop some lucrative properties.
Unfortunately they did not get this switch under way until 1989, by which time the fizz had gone out of the market and it was about to turn down.
All property development had stopped before Mr Robinson took charge. The task was to rent out or sell the group's properties.
So far about pounds 10m of properties have been disposed of, though Mr Musson is loath to say how those prices compare with the costs of the development or what is the value of the properties left on Union's books.
In addition there are large tracts of farmland abroad. The Union team admits to having 'a good few hectares' in Venezuela, New Zealand and Australia, where the Vestey family was once the largest landowner.
It is at present reviewing what it wants to do with it, though in the summer it did sell six cattle stations in northern Australia for pounds 15m. The land sold covered 15,600 square miles, about one- fifth of the size of the UK.
A review of the businesses in Union uncovered a bewildering mix including three Mercedes- Benz dealerships, a contract hire company, a shellfish operation in Australia, a soap distributor in Argentina and a company that imports rabbits from China.
Mr Robinson says he wants to get rid of these non-core businesses. However, he is a practical man and as the shellfish company and the rabbit importer, for example, are extremely profitable he is in no hurry to see them go.
The last, and most crucial, element in the revitalisation of Union was a deal with its banks. Like most other things at Union, its banking arrangements had grown organically.
Mr Taylor found that Union had relationships with 78 separate banks in 18 different financing agreements. When they first agreed a debt standstill in October 1991, Lloyds had taken up the nominal role of lead banker, but the company had to negotiate with each pool separately.
'It was fairly time-consuming,' says Mr Taylor. The business plan was presented to the banks in April last year, but a deal was not finally struck until November.
All this prompts the question - where does Union go from here? The meat market in the UK, long its core business, is shrinking as people reduce their consumption of red meat for health reasons.
'The beefburger business is growing,' insists Mr Robinson. 'In the Far East it is extraordinarily strong. In the UK people eat an average of 20-30 kilos of meat a year. In the Far East they only eat four kilos.'
Mr Robinson is rumoured to be on an incentive bonus scheme running to millions of pounds provided he puts Union on an even keel. It looks as if he is going to earn it.
(Photographs omitted)Reuse content