Greenlight for $1.5b Bellamy’s takeover reignites calls for inquiry into Chinese influence


Based in Launceston, Bellamy’s has experienced soaring growth as an exporter of organic infant formula but saw its shares plunge from a peak of $22.09 in March last year when China withheld access to its market.

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The company’s shares fell below $10 within months and settled around that level until China approved market access in April this year and China Mengniu Dairy lodged its bid in September.

Greens senator Peter Whish-Wilson said companies in other sectors had told him of similar problems when they were shut out of the Chinese market, not only reducing revenue but also the value of their companies.

Senator Whish-Wilson, a former Merrill Lynch executive before entering politics, said the Chinese government appeared to have suppressed the value of Bellamy’s ahead of the takeover bid.

“You can’t rule it out. On the surface, that’s exactly what it looks like,” he told The Age and The Sydney Morning Herald. “It warrants more inquiry. We need to look into this.”

The Bellamy’s sale has deepened concerns in Tasmania because it comes after the $280 million sale of another dairy producer, the Van Diemen’s Land Company, to a Chinese company three years ago.

I think I’m like millions of Australians out there who are very concerned about the Communist Chinese takeover.

Senator Jacqui Lambie

Treasurer Josh Frydenberg approved the China Mengniu Dairy bid on Friday with “enforceable conditions” that require the bidder to ensure a majority of the Bellamy’s directors are Australian residents, invest at least $12 million in its Victorian processing facility and maintain its Australian headquarters for at least 10 years.

Senator Whish-Wilson raised his concerns about market manipulation with Mr Frydenberg in September and also put them to Foreign Investment Review Board (FIRB) chairman David Irvine, a former head of the Australian Security Intelligence Organisation.

A spokeswoman for China Mengniu Dairy said the company declined to comment on the manipulation claim. The company is listed on the Hong Kong Stock Exchange. Bellamy’s shares closed at $13.20 on Friday, up 25¢ after Mr Frydenberg’s statement earlier in the day.

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Tasmanian senator Jacqui Lambie slammed the government for approving the bid for Bellamy’s and warned against a “Communist Chinese takeover” of too many companies.

“I think I’m like millions of Australians out there who are very concerned about the Communist Chinese takeover,” Senator Lambie said. “Every time they open a cheque book we roll over like a dog.”

One Nation leader Pauline Hanson said it was time to say “enough” to the sale of Australian companies.

Labor treasury spokesman Jim Chalmers said the government needed to explain the decision, particularly around the conditions being imposed on the company.

While the Treasurer does not need approval from Parliament to approve a takeover once he has advice from FIRB, the crossbench anger is likely to be channelled into demands for a wider inquiry into Chinese influence and investment.

Centre Alliance Senator Rex Patrick said the takeover was another reason for a broad inquiry by the Foreign Affairs, Defence and Trade committee in the Senate. A motion to set up an inquiry was backed by the crossbench this week but rejected by the major parties.

“Almost every day a significant event or some controversy arises relating to China,” Senator Patrick said. “It’s time for the Parliament to look holistically at the relationship and look to where the benefit lies and where caution in required. Unfortunately both major parties have refused to give support to such an inquiry. We proceed blindfolded.

“Unfortunately the Senate has self-censored itself.”

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