Tony Perrett’s letter to Josh Frydenberg on Lion’s dairy deal

A Queensland MP has written a fierce letter to the Federal finance minister over the sale of the Lion’s dairy business.

MEMBER for Gympie Tony Perrett has spelled out his “grave” concerns on the sale of Lion’s dairy to China Mengniu Dairy Company.

In a letter sent to Treasurer Josh Frydenberg, which The Rural Weekly has exclusive access to, he described the $600 million deal as a “fire sale”.

The Shadow Minister for Agricultural Industry Development said the ACCC’s decision to approve the sale would harm farmers and cost local jobs.

These are his words:

Dear Treasurer,

I write to you following the recent Australian Competition and Consumer Commission’s (ACCC) decision to approve a $600 million deal to sell Lion’s dairy and drinks business to the China Mengniu Dairy Company.

Like many Queenslanders, I have grave concerns about major food processor brands being purchased by Chinese companies with close ties to the Chinese Government. Given the increased uncertainty around food security and the need for greater economic self-reliance because of the coronavirus pandemic, there has been a substantial shift in the public’s expectations around food processing and supply.

In that regard, I strongly support the comments of Prime Minister Scott Morrison who said in Parliament on 8 April 2020 that he would not allow a fire sale of Australian businesses to foreign interests.

The LNP have concerns that the Lion sale to China Mengniu Dairy Company is yet another example of a ‘fire sale’ of our essential and important food processing, that may cost local jobs in Queensland.

As you would be aware, Lion Dairy process milk from a large proportion of Queensland’s dairy farmers, with a considerable group of farmers on the Tablelands in Far North Queensland.

Queenslanders would have considerable concerns around a Chinese owned company controlling one of our major dairy companies and what that may mean for Queensland consumers, as well as its local farmer suppliers.

As such, the Queensland LNP would formally request that the sale be reconsidered through the foreign interest review process, noting your previous comments around a zero dollar approval threshold for all proposed foreign investments of Australian businesses and residential real estate.

At the very least, the LNP believe that the sale should come with substantial caveats that require the Chinese owners to guarantee local supply into the domestic market as well as ensuring proceeds are kept onshore, that local farmers are supported, and local supply chains maintained.

Thank you in advance for your consideration of this issue of national significance.