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Back local agribusiness: Brownes boss

Brad ThompsonThe West Australian
Back local agri: Brownes
Camera IconBack local agri: Brownes Credit: The West Australian

Australia is at risk of being left to cry over spilt milk as overseas companies gobble up domestic agribusinesses, according to Brownes managing director Ben Purcell.

Mr Purcell said the recent explosion of overseas interest in the dairy industry raised fundamental questions about the lack of domestic investment in food processing and agriculture.

"We need to be less pleased with foreign investors paying over-the-odds for our businesses and more concerned about what it is that they can see that we can't see," he said.

Mr Purcell urged more debate on the issue as Canadian dairy giant Saputo celebrated victory in the long-running battle for control of Warrnambool Cheese and Butter Factory.

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Victorian-based co-operative Murray Goulburn conceded defeat yesterday and will sell its 17.7 per cent share to Saputo as part of a deal that values Warrnambool at a maximum of $537 million.

Saputo, Italy's Parmalat, Chinese conglomerate Bright Foods, Japan's Kirin are among the global heavyweights with a growing footprint in the Australian dairy industry, and Mr Purcell said it was time to consider their motivation.

"I think foreign investors, particularly Asian investors, have a fundamentally different view on long-term price and that is why they see value in things we don't see value in," he said.

Mr Purcell urged Federal and State governments and the Australian superannuation industry to do more to support Australian-controlled agribusinesses.

"Otherwise we could have a situation where a lot of the critical manufacturing and processing assets in the country are outside our control," he warned.

Murray Goulburn blasted Australia's regulatory process after losing the three-way battle with Saputo and Australia's Bega Cheese over Warrnambool.

The co-operative said it faced longer delays in having its bid approved by Australian Competition Tribunal than Saputo did in having its bid assessed by the Foreign Investment Review Board, putting it at a disadvantage.

Murray Goulburn will receive at least $92.9 million for the sale of its stake to Saputo, and make a gain before tax and costs of about $51 million.

Saputo will pay up to $9.60 a share if its stake in Warrnambool passes 90 per cent. Warrnambool shares were trading at $4.51 when the takeover battle kicked off in September.

Archer Capital-owned Brownes, Kirin-owned Lion and family-owned business Harvey Fresh are WA's three major milk processors.

Parmalat hinted at a big investment in WA processing last year when it entered the flavoured-milk market, with Harvey Fresh regarded as its prime target.

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