Treasurer Scott Morrison has reportedly approved the sale of Australia’s biggest dairy farm to a Chinese billionaire, sparking fears the price of milk and baby formula will rise.
On Tuesday, Mr Morrison ruled the $280 million sale could go ahead, meaning Tasmania’s 17,800ha Van Diemen’s Land Company will be sold to Moon Lake Investments, a company owned by Chinese billionaire Lu Xianfeng.
According to News Corp, business experts and politicians warned the sale would increase the domestic price of milk and milk products because the farm’s new owner is likely to redirect supply to China.
In the past six months, Australian supermarket shelves have been stripped of baby formula, which is sold and shipped to China.
Milk is a key ingredient in formula. China has seen baby formula made with its milk embroiled in contamination scandals, thus the demand for Australian product.
Tasmanian independent MP Andrew Wilkie told News Corp the farm’s output would be sent overseas, pushing up the price of milk and baby formula in Australia.
“Selling Van Diemen’s Land to a foreign bulk commodity enterprise will result in milk or milk powder shipped offshore in bulk,” Mr Wilkie said.
“This will create uncertainty of supply in the Australian market and put upward pressure on prices.
“One only needs to look at how people in Sydney and elsewhere are struggling to buy baby formula right now because so much of it is being shipped to China to meet skyrocketing demand.”
Treasurer Scott Morrison reportedly defended the sale, telling News Corp that the new owner, Moon Lake Investments, had promised to continue domestic supply.
In November 2015, Mr Morrison blocked the sale of Australia’s largest cattle operation, Kidman & Co, because it was not in the national interest. It was also sought by Chinese investors.