BusinessDesk: Fay poll shows public wants Govt to stop Crafar sale to Chinese buyer

By Pattrick Smellie

Polling for the Michael Fay-led consortium trying to buy the Crafar dairy farms shows an “overwhelming desire for the government to stop in and stop the sale” to the would-be Chinese buyer, Pengxin International.

However, the same poll shows two-thirds support for joint venture investments involving a combination of Chinese and New Zealand interests.

The poll, conducted by UMR Research, comes as Labour’s Associate Finance spokesman David Parker accuses the Overseas Investment Office of buckling to political pressure not to announce a decision on the Crafar farm sale before the Nov. 26 election.

Parker alleges “political motivations behind no decision having been taken in the past six months on the latest foreign application to buy the Crafar farms.”

“On the face of it, there’s no reason the Overseas Investment Office could not have made a decision. So why hasn’t it?” he said.

The Pengxin application follows the rejection of a bid by another Chinese bidder, Natural Dairy.

A well-established and reputable investor in both China and globally, Pengxin is seen by the investment community and by the Chinese government as a fundamental test of the New Zealand-China trade relationship.

Senior investment banking figures have warned that failure to approve the Pengxin bid could see a withdrawal of Chinese interest in New Zealand investments, and a cooling in Beijing to New Zealand’s aspirations in China, particularly Fonterra’s plans for dairy industry development.

The OIO and Prime Minister John Key have both described the Pengxin bid as “complex”, but have given no further detail as to why the application has run so far beyond the OIO’s target timeframe for approvals.

“The only conclusion I can come to is that National doesn’t want a decision to be made until after the election, because the government is already copping so much flak for its intention to sell our power companies,” said Parker.

The UMR poll also finds the public would “prefer the farms are sold to a New Zealand syndicate even if at a lower price”. The Fay consortium, which includes some iwi and private investors, is offering $170 million for the Crafar farms, in receivership, against Pengxin’s offer in excess of $200 million.

The receivers, KordaMentha, have accepted the Pengxin bid, conditional on OIO approval and have said they will not entertain alternatives in the interim.

The UMR poll tested the views of a relatively small sample of 500 people has a margin of error “at 95 percent confidence level” of 4.4 percent, but its results are emphatic.

Some 82 percent saw foreign ownership of agricultural land as “a bad thing”, while just 10 percent thought it was “a good thing”, with almost identical numbers opposing farmland sales to foreign investors.

Most emphatically opposed is Chinese investment, with 81 percent opposing such sales, dipping to around three-quarters of those polled opposing sales to Singaporean, Japanese, German and American investors, while 67 percent opposed sales to British investors, and 54 percent opposed sales to Australians.

Australia gained by far the largest positive support as a buyer of New Zealand farmland, at 33 percent, followed by Britain at 23 percent.

Opposition to selling the Crafar farms was constant across age groups, but stronger among women (88 percent opposition) than men (79 percent), and one in five National Party voters oppose the sale.

Told that the New Zealand consortium’s bid was $30 million lower than the Chinese offer, 74 percent still thought the local offer should be accepted.

The poll did not seek a view on the involvement of Sir Michael Fay, whose involvement privatisations and the “winebox” tax avoidance inquiry in the 1990s largely undid the heroic reputation he gained as the backer of New Zealand’s first bids to win The America’s Cup.

He and business partner David Richwhite relocated to Switzerland in the late 1990s and have had a low profile in New Zealand until Sir Michael’s emergence as a “white knight” on the Crafar farms issue.

Some 78 percent agreed with the proposition that “not allowing foreigners buying the Crafar farms is a principled defence of New Zealand rights and sovereignty”, while 15 percent said it was “bowing to xenophobic and populist hysteria.”

Allowing a sale to Pengxin would be “bowing to Chinese economic power” in the view of just over half those polled.

However, when asked about investments involving Chinese companies in partnership with New Zealand companies, there was 66 percent support, and 56 percent support for the notion of shares in such Chinese companies being listed on the NZX for trading by New Zealanders.

(BusinessDesk)