Plenty food for thought in today's Oz. If the Chinese did want BAL what price is deemed acceptable? $15, $16?? May not eventuate but who knows? Expect BAL to open strong this morn. FIRB being used as ‘xenophobic weapon’: Barry Irvine
One of the nation’s most seasoned and respected food industry executives has warned that the Foreign Investment Review Board is being unfairly used as a “xenophobic weapon’’ to delay or halt Chinese investment in Australia’s agricultural sector.
Bega Cheese executive chairman Barry Irvin, whose company’s market value exceeded $1 billion for the first time late last year and is the nation’s fifth-biggest dairy processor, said too often discussion about Chinese investment degenerated into xenophobia.
His comments came amid another fierce debate over foreign investment in Australian farms after the sale of the Van Diemen’s Land Company to Chinese company Moon Lake Investments was approved by Scott Morrison last week after it was given the green light by FIRB.
“What we had was a lot of alarmist press and alarmist commentary around the purchase of VDL that had been foreign-owned for years. The purchasers clearly have a vision for it but there was almost vitriol around the decision of FIRB,’’ Mr Irvin toldThe Australian.
Labor leader Bill Shorten declared that Australians “deserve a straight answer” over whether Kathmandu founder Jan Cameron’s rival bid for the business was unfairly passed over.
The Treasurer defended FIRB’s decision, saying it would be “catastrophic” if other foreign investors were scared off if the government started picking winners.
Mr Irvin told a private agribusiness forum staged by PPB Advisory that Australia had thrived on foreign investment.
“If people see value here and are willing to invest here it frustrates me no end that FIRB is sometimes used a weapon and quite frankly sometimes a xenophobic weapon to delay or stop that sort of activity,’’ he told the forum.
“What disappoints me is that I don’t think the discussion was had in the way it should be had; it’s just a xenophobic discussion rather than a discussion about: ‘Well, OK, so why don’t you like this really?’
“You know, because you’re seeing people willing to invest; you’re seeing people willing to put money in; you’re seeing people with money; they’ll back their investment with even more money; they’ll step-change the industry; they’ll set an example for others to follow. Believe me, more value will be created here than will ever be taken away by international investment.’’
Mr Morrison is also considering Chinese bids to buy the vast outback Kidman cattle empire for more than $350 million.
An initial offer by Chinese property billionaire Jiang Zhaobai’s Shanghai Pengxin was rebuffed by FIRB late last year, but it has since made a revised reduced offer that does not include the Anna Creek station on the sensitive Woomera military area in South Australia.
PPB Advisory Agribusiness partner Ben Craw said the FIRB annual report showed very few transactions were opposed.
“Ordinarily, you know FIRB is pretty transparent. You know a 30-day process with a 10-day determination time, so we haven’t had much trouble,’’ he said. “But we were in China in December last year and the opening questions with investor groups there are: ‘Let’s talk about Kidman. You know, are you willing to allow us to invest in your country? Why is there no investment?’
“So, it’s quite difficult but it’s the cost of doing business in Australia.’’
Darren Cocks, chief operating officer at the NSW Business Chamber, said some of its members were being approached by Chinese buyers “at a speed they haven’t seen before”.
“There are some challenges for the small and medium-sized companies,” he said.
“The Chinese talk to a particular distributor, fly them to China and walk them in the door and ask them to supply in quantities they have never seen before,’’ he added, noting many were not set up with the supply chains and vertical integration required.
“That is the opportunity and threat for Australian companies. Brand Australia is very solid but if a few things go off the rails, that could turn the corner.’’
