One of Australia’s largest dairy operations is set to be bought by China’s biggest dairy chain, a deal which includes some of the country’s most popular milk and juice brands.
China Mengniu will pay Japanese beverage giant Kirin $600 million for the Lion Dairy & Drinks portfolio.
The Lion brands include Dairy Farmers, Masters and Pura milk; Dare and Farmers Union iced coffee; Big M, Dairy Farmers and Pura Classic flavoured milk; Vitasoy soy milk and coconut milk; juice brands Daily Juice, The Juice Brothers and Berri; and Yoplait yogurt, under licence.
China Mengniu is also behind the $1.5 billion bid for organic infant formula maker Bellamy’s Australia.
«The big issue about this is for our farmers and how tough the dairy industry already has it,» 9News Finance Editor Ross Greenwood said on Today.
«Most Australians don’t know that we import dairy products into this country because we don’t make enough of it here in Australia.
«Milk production has been on decline and dairy farmers have just got out of the business.»
He said Lion Drinks have been trying to sell the business for almost two years and the takeover is subject to approval from the Foreign Investment Review Board.
«(Lion) paid $2 billion dollars for it going back about five-years-ago and it sold for $600 million, that’s how tough the industry is,» Greenwood said.
With Lion Drinks holding close to 20 per cent of Australia’s milk market, there are questions whether our milk products will go to Australian consumers or to the Chinese market, with the deal a sensitive topic for local farmers, consumers and Government agencies.
While Mengniu say the takeover will grow Australia’s dairy industry, Greenwood warns they will likely sell to the market offering more money for it.
The acquisition is subject to Australian Competition and Consumer Commission and Foreign Investment Review Board approvals.