Finance Finance News Frydenberg allows Chinese takeover of Bellamy’s Dairy Company which makes infant formula
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Frydenberg allows Chinese takeover of Bellamy’s Dairy Company which makes infant formula

infant-formula
The Foreign Investment Review Board has approved the $1.5 billion takeover by China Mengniu Dairy Company. Photo: Getty
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Treasurer Josh Frydenberg has come under fire after approving a $1.5 billion takeover of Tasmanian-based Bellamy’s Australia by Chinese dairy giant, the Mengniu Dairy Company.

Independent Tasmanian senator Jacqui Lambie said she was concerned the sale of Bellamy’s, Australia’s fourth-largest baby formula producer, would lead to less infant formula available for families in Australia.

“I think I’m like millions of Australians out there who are very concerned about the communist Chinese takeover,” Senator Lambie told the Nine newspapers.

“Every time they open a cheque book, we roll over like a dog.

“That’s what the country’s doing – whether it’s our national security or our national food security.”

Former Nationals leader Barnaby Joyce also weighed in, telling The Australian he was “disappointed to see yet another piece of Australia sold to the Chinese”.

“I hope they do comply with the conditions”, he said.

Conditions of the sale include the infant formula maker remaining headquartered in Australia for a decade, and run by a majority Australian board.

“With a lot of other conditions there seems to be slippage. If you put conditions they’ve got to be met,” Mr Joyce said.

baby-formula
Mr Frydenberg told the ABC ‘in reaching this decision, there was appropriate consultation with the industry and understanding the dynamics of the market’. Photo: AAP

Mr Frydenberg backed the the Foreign Investment Review Board’s view that the acquisition was not contrary to Australia’s national interest.

The Treasurer has also required the Chinese buyer to invest at least $12 million in infant milk formula processing facilities in Victoria.

“The conditional approval demonstrates our foreign investment rules can facilitate such an acquisition while giving assurance to the community that decisions are being made in a way which ensures that Australia’s national interest is protected,” Mr Frydenberg said on Friday.

Independent MP Andrew Wilkie issued a statement, also urging the federal government to ensure the deal came with an “ironclad guarantee that Australian jobs will be maintained”.

Shares in Bellamy’s, which is No.4 by market share in the Australian infant formula market, surged by more than 50 per cent on one day in September when the Mengniu Dairy Company’s $13.25 cash-per-share bid was announced.

The board of the Tasmanian company unanimously recommended shareholders vote in favour of the proposal, but denied it had anything to do with fast-tracking Chinese regulation to allow expansion in the country.

After a lengthy wait, Bellamy’s is still waiting on backing from China’s State Administration for Market Regulations to sell organic formula in stores.

Bellamy’s shares jumped as much as 2.1 per cent to $13.22 in the minutes after Friday’s open, their highest value since July 2018.

-with AAP