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Australian Watchdog May Block China Mengniu’s Milk Deal

By  |  August 20, 2020

Australia’s government may block China Mengniu Dairy purchase of some of the country’s best-known milk brands, the Financial Times reported on Thursday, August 20, citing unidentified sources who blamed “diplomatic issues.”

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    Treasurer Josh Frydenberg has gone against the advice of the Foreign Investment Review Board (FIRB), which was in favor of approving the AU$600 million (US$430.98 million) deal, the FT reported. 

    It would mark the first government veto since Australia announced in July its biggest shake-up of foreign investment law in almost half a century. That gave the treasurer last-resort power to vary or impose conditions on deals even after FIRB approval, or force divestment in the event of a national security risk. 

    The revision came partly in response to fear that the economic impact of the COVID-19 pandemic would make buying strategic assets easier for cashed-up foreigners. 

    The law does not mention any specific country of origin. China Mengniu’s approach, however, came against a backdrop of increasing Sino-Australia tension after Canberra called for an international inquiry into the origins of the novel coronavirus, which was first reported in China at the end of last year.