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New Zealand to reconsider Chinese farm offer

New Zealand’s High Court has ordered the government to take another look at a Chinese proposal to buy 16 farms. Earlier this month on recommendation by the Overseas Investment Office, the Land Information Minister and Assistant Finance Minister in New Zealand approved a $210 million offer from Shanghai Pengxin Group to buy Crafar Farms, 13 dairy operations and 3 livestock farms which cover more than 8,000 hectares (16,000 acres) and had gone into receivership. A group of New Zealand interests offered $171.5 million, when their bid was rejected they filed suit arguing they would invest more than $200 million by the time they made needed improvements to the farms while the Chinese buyer would not. Foreign ownership of land is allowed only if the acquisition benefits New Zealand.

A Shanghai Pengxin spokesman says they will make improvements to the farms as well and remain committed to the deal. Chinese dairy companies are seeking to buy foreign operations hoping to rebuild consumer confidence in their products since the melamine scandal. New Zealand and Australian dairies are particularly attractive to them.

The Overseas Investment Office is expected to make a new recommendation on the sale in a matter of days. It could again recommend the sale to the Chinese buyer. The farms have been in receivership since 2010.