So, the Treasurer has blocked the acquisition of Graincorp by Archer Daniels Midland. However, the acquisition of Warrnambool Cheese and Butter by Canadian group Saputo is OK.
These two businesses are amongst the last significant, strategically important agribusiness assets left in Australian hands, they are subject to the same rules, same laws, yet the political outcome is different.
Irrespective of your position on the rights and wrongs of these two proposed transactions the fact that there is a different outcome from the political deliberations must be of concern. I have not heard any logical arguments that lead to a conclusion that the outcomes should be different, and can only assume it comes from political expediency, hypocrisy and hubris rather than a dispassionate application of he laws meant to govern us.
The other reason I am pissed off with this decision is that I lost a $50 bet. I was certain that after the approval of the Saputo takeover of WCB in October, that the precedent provided would be sufficient for the Treasurer to ignore the silly blathering of Warren Truss, and acerbic tongue and threats of Barnaby Joyce, and be consistent.
Not so it seems.
There are reasonable, logical and economically and socially defensible arguments on both sides of the question, and inevitably not everyone would have been happy with a consistent decision, but those observing the behaviour of the government will scratching their heads at the inconsistency.
I do however look forward to the smug, self-congratulatory remarks of Mr Truss who I expect will sound like George Pell on Rohypnol, I need to lose some weight, and this may help.
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A cogent argument, as is the contrary one put by Gottleibsons colleague, linked in the article. http://www.businessspectator.com.au/article/2013/12/2/industries/hockey-made-right-call
I do think there is an argument that the difference between WCB and Graincorp is the infrastructure in the latter. However, grain exports from the eastern states are a minority, the vast bulk of Australian grain exports are from WA, so the argument is a little compromised.
In the WCB case, dairy is potentially the new “boom” segment of the economy as Asian diets westernise, and whilst recognising the absence of an infrastructure element in the transaction, it is just as strategic as Graincorp in terms of long term potential.
My irritation is still at the inconsistency, my views on the rights and wrongs of either transaction are secondary.
You might take a look at the argument advanced by Robert Gottliebsen this morning. The two matters are quite different – WCB is about strategic positioning, GC is about essential infrastructure. Soft assets vs hard assets