Chinese Company Reaches $600 Million Deal To Buy Australian Milk Brands
A Chinese company has secured a deal with Australian milk brands worth $600 million.
Dairy company Mengniu will soon own iconic Aussie labels like Big M, Dare Iced Coffee, Dairy Farmers, Pura, Farmers Union, Vitasoy, as well as Yoplait yoghurt and Daily Juice.
All those brands fall under the Lion Dairy and Drinks portfolio, which has been on the market for the past 12 months, according to AAP.
Lion chief executive Stuart Irvine said: "The full divestment of the Dairy & Drinks business will ensure it has an owner that is well placed to grow the business over the long term, while also accelerating Lion's pivot to becoming a leading global adult drinks business."
The deal will be a big win for Aussie producers because at the moment Mengniu gets some of its milk from dairy processors in New Zealand and Europe. Once the sale is signed, sealed and delivered, the Chinese company will ramp up its purchases from Australian suppliers.
Mengni already buys around 825 million 'milk equivalent' litres every year from hundreds of Aussie dairy farmers, according to AAP, as well as 50 million kilograms of fresh fruit.
Before the deal can go through, it has to get approval from both the Foreign Investment Review Board and the competition regulator.
While it might be a win for producers, some politicians haven't exactly reacted positively.
Tasmanian independent MP Andrew Wilkie said: "There's no end in sight to the fire sale of Australian and Australian-based companies to the Chinese. Yes, Lion is already Japanese-owned.
"The issue here is the increasing concentration of control of Australia's leading brands...in the hands of a single country where all business enterprises have obligations to the central government."
Greens senator Peter Whish-Wilson added: "I've got concerns that they're going to be taking a big chunk of raw milk production and making a product that they're just going to sell into China. That's just going to take supply off the market."
The Chinese company hit headlines earlier this year when it announced a $1.5 billion purchase of organic baby formula maker Bellamy's Australia.
Featured Image Credit: PA