Dick Smith wants Van Dairy to be Australian owned

After years of animal welfare, workplace and environmental complaints, there are rising calls for a Tasmanian-based dairy farm operation to become Australian owned.

DICK Smith says a famous Tasmanian-based dairy, controversially sold to overseas interests in 2016, must be Australian-owned.

The entrepreneur and advocate of buying Australian said VDL Co on the state’s North-West Coast should be owned locally.

VDL, now known as Van Dairy, was sold to Chinese businessman Xianfeng Lu as Australia’s largest dairy operation, with 18,000 milking cows on 25 farms, spanning 7000ha.

It has never been in Australian hands, beginning as a British company in the 1830s, then taken over by a New Zealand company before Chinese interests bought it out.

Xianfeng Lu, of Moon Lake Investments, at the Van Dairy property at Woolnorth. Picture: Chris Crerar

After years of animal welfare, workplace and environmental complaints, Van Dairy recently sold a dozen of its farms, with 5000 cows over 2200ha, to Melbourne asset manager Prime Value for $62.5m, but still holds 5000ha, including the main Woolnorth property.

“We should try to buy it,” Mr Smith said, pointing to the return of Aussie icons such as Vegemite and Rosella into Australian control in recent times, after being sold overseas.

Vegemite was first made in Australia in 1923, and was among a batch of brands sold by US foods producer Mondelez to Aussie firm Bega Cheese for $460m about three years ago.

Similarly, Rosella, founded in Australia in the late 1800s, was owned by multinational Unilever for 40 years, until sold to Aussie brand Sabrands in 2013.

Mr Smith said there was a pot of money, earning next to no interest, floating around in Australia looking for investment and it should be piped into strategic industries.

“It’s absolutely imperative we buy [Van Dairy],” Mr Smith said.

He remains critical of the 2016 sale and of the Foreign Investment Review Board’s approval.

There has been years of animal welfare, workplace and environmental complaints at the Van Dairy farms.

Andrew Wilkie, independent member for Clark, said VDL was a mess since the sale.

“It has gone worse than expected at every turn,” Mr Wilkie said. “There’s the opportunities not exploited, the promises not kept, and the property has gone backwards.”

In the sale and review process, the new owners pledged to spend $100m over five years and to create almost 100 new jobs.

“These promises haven’t been kept, and there was talk of conservation work and direct flights to China, which have also not eventuated,” Mr Wilkie said.

He said there was also the opportunity cost, because one of the failed VDL bids wanted to brand the milk Tasmanian for use in downstream processing on the island, vertically integrating cheese, cream and other processed dairy products for export.

“That opportunity was punted aside by the federal and state government,” he said.

The new free trade deal with the UK is expected to favour dairies that produce premium, niche goods.

There are calls to return Van Dairy to Australian ownership.

Mr Wilkie said the Van Dairy debacle should be a wake-up call for the federal government to create more stringent criteria for the FIRB and to draw up legislation to enable sale deals to be overturned if promises were not kept.

“Genuine strategic assets, such as ports and gas distribution or large farms, should not be eligible for sale to foreign entities,” he said.

Tasmanian Greens Senator Peter Whish-Wilson said there had been problems at Woolnorth for decades, particularly irrigation and effluent management, and the NZ owners had struggled.

“Moon Lake was made aware of the issues and made announcements they would invest to correct those issues,” Senator Whish-Wilson said.

“I was optimistic the $60m raised by the sale of farms may be reinvested in remediation, but I can’t see any evidence that’s the case.”

Van Dairy was approached for comment.