VAN DAIRY-The grim downside of foreign investment in Australian agriculture
Written by: Duncan B. on 16 April 2021
Van Dairy traces its origins to one of Australia’s oldest companies. In 1824, King George IV established the Van Diemen’s Land Company as a charter company. In 1825 he granted the Van Diemen’s Land Company 350,000 hectares of land in the colony. (What the Indigenous inhabitants thought of a foreigner giving away something that wasn’t his to give is not known.)
In 2008 the New Zealand-based New Plymouth District Council, through its investment arm Taranaki Investment Management, purchased the VDL Company from the New Zealand company Tasman Agricultural Limited who had purchased the VDL Company in 1993. In 2015 the New Plymouth Council decided to sell the VDL Company. Initially it looked as if an Australian company would be the purchaser.
Two Australian companies, OnCard and Tasfood bid for the VDL Company. The New Plymouth Council initially accepted an offer of $250 million from Tasfood, but reneged on the deal in favour of a higher offer of $280 million, from a Chinese company.
That company was Moon Lake Investments, run by Liu Xianfeng. Liu Xianfeng ran a seafood business before founding Niangbo Xianfeng New Material Company in 2003. This company is the controlling shareholder in Kresta Holdings of which Mr Liu is the biggest shareholder, Managing Director and Executive Chairman. Kresta is well known to Australians as a major retailer of blinds and awnings.
The takeover of the VDL company by Moon Lake was approved by the then Treasurer Scott Morrison. At the time Morrison praised Moon Lake and spoke in glowing terms of the investment the company would bring and the number of jobs it would create.
The Foreign Investment Review Board attached undertakings to the deal which required Moon Lake to hire an extra 95 staff and to invest $100 million into the company. The company has not met these undertakings with staff numbers remaining the same and only about $20 million being invested.
After the take-over, Moon Lake changed the company’s name to Van Dairy. The company has 25 farms, 30,000 cows on 17,000 hectares and about 145 fulltime employees and 34 casuals. It produces fresh milk, milk powder and infant formulas.
Trouble started as soon as Moon Lake took over. In 2016, even before he had completed the purchase of Van Dairy, Mr Liu tried to sell the company in China to raise some cash. This attempt was blocked by the Chinese Securities Regulator.
In 2018, the CEO, Deputy Chairman and the four independent non-executive directors all resigned, over the owner’s failure to make necessary investment in irrigation systems and maintenance. This left Mr Liu to run the show himself with a general manager.
In 2019 a group of senior staff wrote to Mr Liu warning of animal welfare issues due to poor operational repairs and maintenance standards.
In early 2020, Van Dairy was sued by the previous owner over a sum of $2.3 million which they claimed they were owed due to an agreement on changes to milk prices.
A much publicised plan by Van Dairy to transport ten million litres of fresh milk each year directly from Tasmania to China has never eventuated.
If you go to the Van Dairy website Vandairy.com.au, you will read many fine words about how Van Dairy looks after its livestock, its employees and the environment. The reality is very different. The livestock, employees and the environment have all suffered at Van Dairy’s hands. There have been many allegations of animal welfare abuse and over-stocking of cattle, including cows being left without food and water, and cows suffering from disease.
The overstocking has caused the effluent systems of the farms to be over-loaded and to fail with an enormous risk of polluting waterways and the environment which Van Dairy claims to care so much about. There is a lack of maintenance and repairs to the effluent systems and irrigation equipment. A Tasmanian Dairy Industry Authority (TDIA) audit of Van Dairy earlier this year found that 83% of Van Dairy’s farms had failed to comply with the Farm Dairy Premises Effluent Management Code of Practice. It is not surprising that Van Dairy is having trouble finding experienced staff willing to work for them.
It is alleged that the Tasmanian Dairy Industry Authority, EPA and other regulatory bodies have failed to deal with Van Dairy’s problems since 2016, and are only recently starting to do anything about them.
According to recent reports, Mr Liu is looking to sell ten of Van Dairy’s farms to a Melbourne-based investment company, Prime Value Asset Management. A British company and local farmers are also interested in buying some of the farms.
We often hear from certain interested parties how much Australia needs foreign investment in our agriculture, and how much we benefit from it. The Van Dairy saga shows that this is not the case. This company was just a plaything, sold by one foreign owner to another foreign company. Australian workers, cows and our environment have all been the losers from this deal.
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