Chinese Government-owned Bright Dairy’s deal to buy a majority stake in Canterbury milk processor Synlait has drawn fire from Green Party co-leader Russel Norman.


Norman says the Government’s review of overseas investment needs to ensure New Zealand retains the ability to block companies like Bright Dairy from controlling our dairy industry.


Bright Dairy is China’s third largest dairy company. It is controlled by the Shanghai Municipal Government and the Chinese Central Government’s state-owned Assets Supervision and Administration Commission, both of which are under the direction of the Chinese Communist Party, Norman says.


“The Chinese Communist Party has made no secret of its desire to get control of global primary production infrastructure to send cheap agricultural product back to China. The takeover of Synlait by Bright Dairy is a bad deal for New Zealand.


“The profits made by Bright Dairy will simply be siphoned out of the country, adding to our chronic balance of payments deficit.


“The milk Bright Dairy takes out of the processing chain in New Zealand could just as easily be processed by Fonterra,” Norman says.


New Zealand-owned Fonterra will be required, under the Dairy Industry Restructuring Act, to provide millions of litres of milk to Bright Dairy, effectively subsidising its competitor.


Bright Dairy will then compete against and undercut Fonterra in the Chinese market, selling its milk as ‘New Zealand’ product.


“There is nothing to stop Bright Dairy from mixing New Zealand and Chinese product together in its products throughout the world, while still using the ‘Made in New Zealand’ moniker,” says Norman.


“The 2008 melamine scandal affected most dairy companies in China including Bright Dairy.
“This deal therefore actually poses risks to New Zealand’s brand.”


Norman says he is skeptical about whether the Government is taking the Overseas Investment Office review seriously “given the advisors to Finance Minister Bill English for his overseas investment review are New Zealand lawyers who work for overseas companies”.