Andrew Wilkie and Peter Whish-Wilson flag concerns in relation to takeover bid of infant-formula Bellamy’s by Chinese company

Federal parliament has heard the recommended sale of a local infant-formula business to a Chinese company would be worrying to many Tasmanians.

Tasmanian Greens Senator Peter Whish-Wilson. Picture: AAP/ROB BLAKERS

The recommended sale to a Chinese company of local infant-formula business Bellamy’s would be worrying to many Tasmanians, Federal Parliament was told yesterday.

Independent Member for Clark Andrew Wilkie and Greens Senator Peter Whish-Wilson flagged concerns in relation to the $1.5 billion takeover bid by China Mengniu Dairy.

Bellamy's Organic Toddler Milk Drink.

Mr Wilkie said community anxiety about the Hong Kong-listed company’s offer to the Tasmanian-based business, which was unanimously accepted by the Bellamy’s board and announced on Monday, was unsurprising.

“A lot of Tasmanians think there is too much foreign ownership already,” the MP said of the bid, which is subject to Foreign Investment Review Board approval.

“About a quarter of the state’s agricultural land is already foreign-owned, the biggest dairy asset [Van Diemen’s Land Company] is foreign-owned and now there is the prospect of this iconic Tasmanian company being sold.”

Mr WIlkie said the FIRB needed to stringently assess whether or not the public interest would be served if the proposed sale went ahead.

“I am not saying Bellamy’s should not be sold. I am saying that if it is sold, the Government needs to be mindful of the anxiety in the community and apply ironclad conditions to the sale.

“While we need foreign investment, it must not be unrestrained. Any future sale must come with safeguards so we don’t have a repeat of the VDL fiasco.”

With the sale of VDL, the state and country’s largest dairy asset, many promises were broken, Mr Wilkie said. The company was bought for $280 million by Chinese businessman Lu Xianfeng’s Moon Lake Investments in 2016 after it outbid Australian competitors.

“There were about 100 new jobs to be created – they weren’t,” Mr Wilkie said.

“There was to be about $100 million invested on-farms – hasn’t happened – and significant environmental work done on farms – no.

“The Government has to do better with the Bellamy’s sale than it did with VDL.”

“Avoid another fiasco.” Tasmanian MP Andrew Wilkie delivered a strong message in Federal Parliament yesterday. Picture Kym Smith

Mr Wilkie said he was urgently seeking a meeting with the Federal Treasurer to express the concerns of the Tasmanian community.

During Question Time on Tuesday, Tasmanian Senator Peter Whish-Wilson called for “robust” laws and regulations that delivered in the national interest.

He described foreign investment as “a very sensitive, very thorny, very confronting issue for lots of Australians, especially in my home state of Tasmania”.

In Parliament, Mr Whish-Wilson also suggested the share price of Bellamy’s may have been intentionally suppressed by the Chinese Government’s refusal almost two years ago to grant the necessary certification to enable the company to keep exporting into the country.

This followed a difficult period and stock market turbulence for the company when it was unable to meet skyrocketing demand, particularly from China, for the organic baby milk product.

Senator Whish-Wilson painted a picture in the Chamber of a hypothetical investor who had stuck with the company through turbulent times in the belief it was just a matter of time and accreditation before trade recommenced between the two countries.

How was this investor to feel after learning Bellamy’s had been in discussion for six months with its biggest competitor, a Chinese-government owned entity, he asked.

“You’d be forgiven for thinking the share price of your stock had been suppressed by not getting approval to sell to China, and the same company… had deliberately manipulated the share price of that company, exhibited predatory behaviour towards the stock price, and come in and bought your asset at a steal,” he said.

“The question I would like to know from the CEO of Bellamy’s is why sell the company now [before securing accreditation that would likely raise the share price]?”

Former Bellamy’s chairman Rob Woolley, a driving force behind the company’ outstanding share market performance earlier this decade, also advised caution going forward.

“I think Tasmanians will be sad to see another company finally leave the island and, if successful, become 100 per cent Chinese-owned and controlled, theoretically at least, by the Chinese Government,” Mr Woolley said.

“We have seen bad overseas investment before and one of the worst was the one that I was involved in when we were the losing bidder on the VDL company [previously owned by New Zealand business interests].

“That company promised lots of things for the local community and as far as I can see has not delivered any.

“I don’t see this as being a foreign conspiracy. If anything, it’s just a flaw in that it’s too easy for people to buy into Australian assets.”

Nevertheless, some Tasmanians were set to profit handsomely from the sale if it went ahead, including Tasmanian businesswoman Jan Cameron, who would receive $285 million for her 19 per cent share in the company.

“They’ll do well out of it,” Mr Woolley said.