Hello and welcome to the blog...and as often promised, a post about the shenanigans surrounding the impending sale of Warnambool Cheese and Butter and GrainCorp...and yet again I am a follower rather than a creator, and so I try to understand and inform myself as to the facts, but as a result this post is largely opinion...and chances are we have all read and/or seen the same reportage so I'll keep it brief.
With Canadian based Saputo seeking to buy out WCB, Australian owned Bega and rival Murray Goulburn have had a bit of poke at it and as a result the WCB share price...(and holders-Ed)...has/have done very nicely, although the price has dipped slightly in recent days...(and then massive Japanese brewer Kirin (through subsidiary Lion) grabbed a bunch of shares to bring their stake in WCB up to around 10%-Ed)...true, but this is reported as consolidating their stake in a strong performer (my paraphrase), rather than a 'take-over bid'.
Obviously comparisons with world no1 dairy company New Zealand's Fonterra and the state of the Australian industry, have shown/high-lighted the vast chasm between what NZ have already organised for themselves, and what's happening here in Australia...dairy is a growing Asian staple and has huge export potential, and we as a nation are perfectly placed to contribute significantly yet one of our premier Dairy Producers is at risk of going 'off-shore'.
Admittedly the debate has included 'monopoly issues' should a domestic buyer, eg, Bega, be successful in it's bid...and then the counter-point that this internal purchase would help create a global player to compete with the likes of Fonterra...and of course there's the atrocious behaviour of the two main supermarket chains Coles and Woolworths and the effects they are having with their 'Milk Price War' and ludicrously low 'farm gate prices'...
I was stunned to recently hear that South Australia doesn't actually have a 'Dairy Plan' at all, that it simply 'ran out' and the Weatherill Labor government haven't bothered to do anything to protect dairy producers...and I use protect because as best I can tell the Dairy Industry is effectively under attack from all of the above players...Australia is sitting in a global spotlight, dairy is a prime target, and our politicians are irrelevant bystanders...
I can only think that our illustrious leaders are quite happy for this to happen...and if I hear one more halfwit refer to the sale of Australian farms and/or production facilities as being 'Foreign Investment' I'm going to metaphorically slap them...possibly 'actually' if they say it to my face...
And on top of the whole debate sits the motivations, intent, and conduct of the relative Boards...there's no guarantee that a majority Australian owned company will be governed for the benefit of local producers, manufacturers, eg, the WCB Board are supporting the Saputo bid...what a mess...and again it looks almost constructed, more contrived than accidental.
Like many people, I am deeply concerned with language being used by Prime Minister Tony Abbott, eg, 'Australia is open for business', which seems by design and application to actually mean up for sale, and the Coalition clearly are supporting the sale of GrainCorp.
Here's a Thought: stop handing out billions in Aid money to Asia, and instead invest that money in local producers and/or critical infrastructure, eg, dairy, and provide the equivalent in product...this works on many levels...1) the money stays in Oz, 2) creating employment in the dairy industry, 3) which creates strong growth in adjacent industries and services, 4) providing a strong economic base for rural communities...in 'Working With Indonesia' I outlined the same strategy to provide the beef/protein markets in Asia, address live trade, etc.
It is as simple as investing that Aid money in Australian and providing product at a dollar value above the re-directed funding, ie, if the Aid was $100million, invest that in local producers to provide $110m in dried milk, etc...and we can afford that relative increase because our local economy is strong.
Similar issues are at play with the impending sale of GrainCorp to American agribusiness giant Archer Daniels Midland, just on a larger and arguably much more critical scale because of the monopoly they have on the handling of grains down the East Coast of Oz...this isn't just a company deciding it's own destiny, albeit with a number of producers/ suppliers involved, with GrainCorp, control of the whole storage, distribution, and export chain is up for grabs...one can effectively control the market.
Again I can only acknowledge that my entire understanding of this sale comes via the media, but it does seem fairly straightforward...if Australian politicians are so concerned for local producers and manufacturers then why do they act with with virtual indifference...and the Foreign Investment Review Board is a perfect example...
Relatively new to the debate as I am, all I have seen the FIRB do is rubber-stamp approvals for sales that are above the ridiculous $244million sale price thresh-hold that triggers their involvement...and the debate as always remains, how much land can Australians buy in China or Singapore or Quatar, etc...and the answer of course is none...so why are we selling them our country?...and it opens a whole debate re the role of Aussie companies like BHP in places like New Guinea....but a debate for another day.
I'll finish here for a short Sunday post...it is 17.30hrs, and all I can do is re-iterate the broader issues as I've gleaned from 'other' media...(he means the real media-Ed)...yes, I probably do...but you're not going anywhere without your cake...(mmm, the puddin'-Ed)...
Taking The Cake: this week is a toss up between 2 issues...so I'll cover both...
Tomorrow: Raining Money for 141 and Schools Named
Naracoorte High School has been named as the SE school where the year 10 student was blamed for the teacher accessing internet pornography...and the teachers current Adelaide school where parents haven't been told about his suspension...
And then on to the latest betrayal and corruption of the SE Forestry Estate Sale, whereby 141 Plantations have just been handed a massive increase in their water entitlements to the detriment of local irrigators who have had theirs cut...charming...(I feel another 'Optimism Post' coming on-Ed)...
I am Nick Fletcher and this is my blog...cheers...
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