ACT Urges Caution In Overseas Dairy Investments

Thursday 7th Sep 2000 Penny Webster Media Release -- Other

With all the uncertainty in the dairy industry at the moment farmers should be wary of the dairy companies and dairy board investing their money offshore, said ACT MP and dairy farmer Penny Webster. The Dairy Board has agreed to purchase a 51 per cent share of S.A. Fabrica de Produtos Alimenticios Vigor, Brazils fifth largest dairy company. The purchase price would be up to US$138.9 million (approximately NZ$328 million), with the agreement providing for a further US$83.3 million (NZ$198 million) to be contributed as capital within three years. “It is bizarre that a group of people who can’t get on it one forum can decide to make huge investments in another. Surely it is common sense to sort out affairs in your own house before meddling in those of another?

“Farmers must look closely at their industry and start asking the hard questions. Where is the certainty? What is the future? Are individual companies only investing overseas so they are in a better position for mergers or take-overs? What happens to the investment if industry deregulation occurs?

“Given the high level of uncertainty in the industry’s structure, the Dairy Board has absolutely no mandate to expose its shareholders to unnecessary risk. Are we as dairy farmers doing so well that we should no longer care on the destination of our assets? I think not.

“I strongly suggest the Dairy Board sorts out its own affairs before buying in Brazil, Australia, or anywhere else,” said Penny Webster.

ENDS

For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at act@parliament.govt.nz.

© Scoop Media