The sale of Australia’s largest and oldest dairy farming outfit to a privately owned Chinese company has been welcomed by local and national players amid warnings over Australia’s future food security.
The Van Diemen’s Land Company (VDL) has always been foreign owned and it has been revealed it will remain so, with privately owned Chinese company Moon Lake Investments (MLI) pipping competing Australian company Tasfoods Limited (TFL) at the post.
MLI, an Australian company set up specifically for the purchase by Chinese businessman Lu Xianfeng offered $ 280 million to current owners, New Zealand’s New Plymouth District Council, plus a non-refundable $ 20 million deposit.
The sale is now the subject of legal proceedings brought by TFL who have obtained an injunction from the Supreme Court in Victoria to stop the sales agreement from being terminated before a hearing next week.
The deal is also subject to approval by the Foreign Investment Review Board.
VDL sale timeline:
- Deal struck for VDL sale to TasFoods on November 6
- TasFoods deal “in excess of $ 280 million”
- NPDC announces new buyer with “commercially superior” bid on November 20
- TasFoods launches legal action over failed deal
- Chinese businessman revealed as buyer on November 26
In a statement MLI said it intended to continue to supply fresh milk to the local Tasmanian market and maintain the existing local workforce.
Tasmanian Greens senator Peter Whish-Wilson said as long as the company was creating local jobs and local wealth, then the sale was a positive thing.
“Like most Australians I would be concerned if a foreign company that bought a big, important asset if they didn’t employ local people, they didn’t provide further investment opportunity and contribute to the local community, I’d be worried,” he said.
“There have been situations in the past with Chinese state-owned enterprises, and that’s a separate matter.
“If this is a private Chinese company, and they support local jobs and communities that should be fine.”
‘Availability and pricing of food’ part of sale review
He said under the Foreign Investment Review Board approval process the Government will investigate both commercial and security implications of the sale.
But Senator Whish-Wilson said there was no way of tracking where Australia’s food was being sold.
“Of course with food and agriculture, we haven’t got far enough down the path yet where we can assess issues around food security,” he said.
“The Greens are very concerned that in the future food security is going to be a huge issue, and we have to be very aware of what’s happening with our local produce, where it’s being sold and whether we’ve got security around our own needs.”
Senator Whish-Wilson said, in the past, Chinese and Middle Eastern-government-owned businesses have gone offshore to buy agricultural assets, employed their own people and sold directly into their own markets.
We need to be very, very careful about casting some bogey over international investment into the market because it’s absolutely vital.
Tasmanian Liberal senator Richard Colbeck
“That can have implications for not just local jobs, if you’re bringing in foreign workers, but can also have implications for local markets,” he said.
“The availability and pricing of food.”
Tasmanian Liberal senator Richard Colbeck said foreign investment was vital to Australia’s agriculture sector.
“VDL in its 190-year history has always been owned by an international owner,” he said.
“That’s always been the case and the current development that’s occurred and the current significant employment that’s occurring there, has occurred under international ownership.”
“We need to be very, very careful about casting some bogey over international investment into the market because it’s absolutely vital.”
Circular Head Mayor Darryl Quilliam said while he would have liked to see an Australian company succeed, MIL’s investment was a great thing.
He said the company’s commitment to expansion would see more people employed in the region.
“This company has got a lot of money and they want to do a lot of development which is exciting,” he said.
“It’s going to mean that there’s going to be people employed from our local district on that property so yep, it’s quite exciting times,” he said.
“I think that it’s great not only for Circular Head but for the whole state of Tasmania in the dairy industry and with contractors.”
He dismissed concerns about Chinese ownership.
“This company has never been Australian owned,” he said.
Mr Quilliam also said he was not concerned about the product being sent to China because most of the processed dairy products coming out of Tasmania are bound for Asian markets anyway.
Topics: agribusiness, dairy-production, federal—state-issues, greens, tas