Billabong is the latest Queensland icon to fall into foreign ownership

BILLABONG is only the latest iconic Queensland brand to fall into foreign hands. We take stock of the others.

• New break for Billabong
• Qld brands forced to close

ICONIC brands synonymous with Queensland are falling into foreign hands as financial pressures and increased globalisation take their toll on local companies.

After today Billabong, the company founded on the kitchen table of Gold Coast surfer Gordon Merchant more than 45 years ago, will cease trading on the Australian Securities Exchange.

US-based retail company Boardriders successfully struck a takeover deal for the company last month.

Merchant spent years knocking back multiple offers to take over his retail empire, which he had built from the ground up, but ultimately backed the latest $210 million bid.

But the death knell for Billabong as a Queensland company is not unique. There are a string of foreign entities taking over some of our most-loved businesses, though the outcry from consumers has been far more muted than in the past.

Some may remember the “beer wars” of the late 1980s, when Alan Bond’s 1985 purchase of the famous Milton Castlemaine Perkins brewery, home of the XXXX brew, caused an uproar.

The decision by the West Australian tycoon, who also owned Perth’s Swan brewery, to include a reference to his home state on the XXXX beer cans led to protests and the rise of a local rival, Power’s brewery at Yatala.

Rocky Barnes wears Billabong, the surf and swim wear that has been synonymous with Queensland.

It even culminated in a now famous TV ad featuring rugby league legend Wally Lewis raising a Power’s beer, proclaiming “Sorry Bondy”.

But by the time Castlemaine Perkins and the famous XXXX was sold across the ditch to New Zealand’s Lion Nathan in 1990, and later bought by Japanese brewing giant Kirin in 2009, it drew much less outrage.

Many of the state’s most well-known consumer brands are now in the hands of overseas giants, including Bundaberg Rum, Golden Circle and since last year, Toowoomba’s Weis ice-cream bars, founded by Les Weis in 1957.

QUT Business School Associate Professor Gary Mortimer said many consumers were oblivious that some of our most iconic brands were now owned by international private equity firms or global businesses.

But he cited last year’s furore around rumours brewing at the Castlemaine Perkins’ Milton site could be shut down, and all production moved to Sydney, as example of the sensitivity people still retain about where their products are produced.

“What a lot of people don’t always realise is that the XXXX range is owned by a Japanese company,” he said.

“Ultimately, who owns a company doesn’t really necessarily matter to consumers – what does matter to them vitally is whether it is made and produced here in Queensland.

“But we do float within a global market and a global economy, and we know that Australian brands are really important, and recognised throughout the world.”

The iconic XXXX beer brand is now part of Japan-owned Lion.

But whether much can be done to prevent foreign ownership – or whether it is even good to do so – is a source of some contention.

Though some industries are heavily protected by foreign ownership regulations, such as banking and telecommunications, most consumer goods are open to takeovers and buyouts.

Griffith Business School’s Dr Daniel Ringuet said he didn’t believe there was much that could be done to prevent more locally owned businesses being bought by overseas companies, but said the implications could be “very bad”.

“Sadly, we have a history (in Australia) of losing companies,” he said.

“We tend to take an easy approach when a company looks like it will leave, we accept promises that they will make up the shortfalls, but that doesn’t happen.

“The main concern when we lose a company (to foreign owners) is taking away employment opportunities – the chance for young men and women to train in these industries, and losing years of experience.

“And there can also be a backlash from consumers – once you get on the nose with them, they’ll think twice about buying your product.”

But Dr Ringuet said ultimately the lure for some companies to sell – whether to overseas buyers or not – was a financial decision.

“Businesses are like humans, they’re about survival, and they feed themselves with funds and profits.

“If they’re not getting the returns to shareholders, you need to find a way to keep the money.

“I hate seeing Australian companies move offshore. Unfortunately it’s the nature of international business today.”

Qld companies with foreign owners

Billabong: Founded by surfer and surfboard shaper Gordon Merchant in 1973 on the Gold Coast, the company was acquired by US-based company Boardriders last month. Billabong grew to be one Queensland’s most recognisable retail brands, both here and around the world. Following the deal and after 18 years of highs and lows, it will cease trading on the Australian Securities Exchange today.

Castlemaine Perkins: The home of the famous XXXX brew and the “Fourex Man”, Castlemaine brewery famously began when Victorian brothers Nicholas and Edward Fitzgerald took over a distillery on Milton Rd in 1877, naming it Castlemaine after their brewery in Victoria. It later purchased Toowoomba’s Perkins brewing company to become Castlemaine Perkins. It would later merge with Tooheys in 1980, be bought by Alan Bond in 1985, before eventually being taken over by New Zealand company Lion Nathan. Japanese brewing giant Kirin bought ownership in 2009.

An early Weis ice cream truck on the move

Weis: Last year multinational Unilever purchased the 60-year-old Toowoomba ice cream bar maker for an undisclosed price. Unilever, a British-Dutch consumer company with more than 400 brands including ice cream labels Ben & Jerry’s, Magnum and Paddlepop, vowed to keep Toowoomba’s manufacturing plant and 85 staff employed under the deal.

Golden Circle: The company, most famous for its canned pineapples, was originally known as Queensland Tropical Fruit Products, and began as a cooperative between growers. US food processing giant Heinz bought the company in 2008 for more than $280 million.

The assembly line at Golden Circle cannery

Bundaberg Sugar: UK-based company Tate & Lyle took ownership of Bundaberg Sugar Co in 1991, before offloading it less than a decade later to Belgium-based company Financiere des Sucres in 2000 for $425 million.

Bundaberg Distilling Company, maker of Bundaberg Rum: The famous rum-making arm of Bundaberg Sugar came under the full ownership of UK alcoholic beverages company Diageo in 2000, after 50 per cent of the company had been sold to Carlton and United Breweries in 1986. The company was formed in Queensland back in 1888, using the waste molasses from the local sugar mills. Its famous polar beer mascot was added in 1961.

The assembly line at Bundaberg Rum Distillery

Kirks: The Queensland soft drink company, which was officially established in 1959 though its history dates back to the 1880s, is owned by Coca-Cola Amatil, the Asia-Pacific franchise arm of US beverage giant Coca Cola.

Pauls: The famous Queensland dairy company has traded under numerous names since its establishment in the 1920s, including Queensland United Foods. In 1998 it was purchased by Italian company Parmalat, which in turn is now controlled by French multinational dairy company Lactalis.

Pauls is now owned by Parmalat, which in turn is owned by French company Lactalis.

MiM Holdings: One of the more controversial takeovers, Queensland mining company MiM Holdings, the parent company of Mount Isa Mines Limited, was taken over by Swiss mining giant Xstrata for almost $3 billion in 2003, marking its exit from the ASX.

Defiance Flour: The Defiance Flour Mill was established by Irish immigrants Patrick and Ellen O’Brien and their business partner George Crisp in 1898. After generations of family ownership, it was sold to the US company Bunge Group in 1998. It’s now owned by Allied Mills.