Dairyworks Takeover should be Ministers’ Decision

27 Nov, 2019

From Chris Leitch, Leader

Ministers should accept responsibility for the final decision on the takeover of the second largest cheese maker in New Zealand, Dairyworks and not hide under the skirts of the Overseas Investment Office.

The $112 million takeover bid is by Synlait - owned 39% by the provincial government of Shanghai and therefore ultimately the government of China.

Synalit also purchased Talbot Forest Cheeses earlier this year, which gives it a dominant position in the manufacture of New Zealand cheese.

Given the Ministerial Directive issued to the Overseas Investment Office in late 2017, and the proposals for a revamp of the OIO legislation made public last week, which contain a "national interest" provision, ministers David Parker and Eugene Sage should be making the final decision.

The Ministerial Directive clearly states that “The merits of investment in the primary sector can be less compelling given that we are already world leaders in this area”.

“In our view having over 50 percent of the country’s cheese making capacity in the hands of an overseas owned company registered in the Cayman Islands does not provide the "substantial and identifiable” benefit for New Zealand that the directive calls for” Chris Leitch says.

The takeover of Dairyworks is another step in the chess game that China is implementing to secure checkmate over New Zealand's agricultural production and our dairy industry in particular.

“We are already being softened up for a move to change Fonterra's structure to a corporate model which would give share access to outside shareholders and overseas entities” Mr Leitch says.

A Social Credit government would radically change the focus of the Overseas Investment Office to one that is designed to maintain the utmost ownership of New Zealand land and productive businesses in New Zealand hands.

That process would likely involve renegotiating or repudiating the Trans Pacific Partnership agreement and the Regional Economic Cooperation Partnership currently under negotiation, to ensure that New Zealanders and their long term ownership of the country was first priority.

Social Credit has recently lodged a judicial review in the High Court over the Overseas Investment Office decision to approve the sale of Westland Milk Products to Jinjiang, a wholly owned subsidiary of Inner Mongolian Yili, a Chinese conglomerate 25% owned by the Chinese government.