Getting caught in the middle
News comes that Australia’s government is blocking Mengniu Dairy in China from taking over Dairy Farmers in a A$600 million (€363.8m) bid, after its foreign investment review board (FIRB) advised approval.
That would mark the first government veto since Australia in July announced its biggest shake-up of foreign investment law in almost half a century. That gave the treasurer last-resort power to vary or impose conditions on deals even after FIRB approval, or force divestment in the event of a national security risk, the New York Times reports.
The official Australian response is that they have tightened up rules on foreigners buying Australian assets due to the Covid-19 crisis and not having distressed strategic assets bought by foreigners. Rather interestingly, Australia is also in a trade war with China over beef and barley, after the latter country banned exports.
Meanwhile, like other country governments, they are scrapping with China over spying, hacking, influence peddling and blame about the coronavirus, according to The Times. All serious concerns.
This is not the first time dairy has been caught in the crossfire when countries fight over tariffs and other matters. The Boeing-Airbus-cheese tariff debate between the European Union and the US comes to mind for recent events. Takeovers of companies are common – the UK itself has Dairy Crest (now owned by Canada’s Saputo), Müller’s (Germany) buying of the Robert Wiseman liquid operations, France’s Lactalis taking over Scotland’s McLelland cheese…
Not sure what to think, and whether Chinese companies such as Mengniu should be punished for the sins of their fellow countrymen in Australia and other countries. In a way it does not seem fair at all, but as we’ve seen in the past, fair doesn’t come into it sometimes. Should companies be wholly owned in the countries they’re based? What to do with multinationals like Unilever and Nestlé then, who own companies in so many countries.
I don’t think dairy should pay for the sins of other sectors, when it comes down to it. And I do think trade wars are not helpful in the end. They help neither consumers nor countries.
- Suzanne Christiansen, editor, Dairy Industries International.
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