Page 5 - Food & Drink Magazine October 2019

✷ TOP HITS
THE MOST VIEWED STORIES ON OUR WEBSITE LAST MONTH
DRAKES FORMALISES METCASH SPLIT Family-owned, independent supermarket operator Drakes Supermarkets has separated itself from wholesaler Metcash, opening its own $125 million distribution centre.
✷ SEE MORE ON P28
FOOD SAFETY CRISIS JUNKIES
If food quality and safety standards are to be embedded in a company’s culture, a shift in focus is needed, says McCormick & Co director of Global Quality Systems and Food Safety, Jill Hoffman.
✷ SEE MORE ON P40
ROBOT ICE CREAM
In a world-first, robotic retail technology pioneer Niska has brought an interactive retail experience incorporating cutting edge robotics and artificial intelligence technology to a Melbourne ice
cream bar.
✷ SEE MORE ON P22
BICKFORD’S OPENS NEW $20M FACILITY Cordial and beverage manufacturer Bickford’s Group has opened its new high-speed production line, created by Sidel and in conjunction with Tetra Pak. It can produce 18,000 bottles per hour.
✷ SEE MORE ON P30
PEPSI LAUNCHES CREAMING SODA
PepsiCo introduced its Pepsi Max Creaming Soda,
a no sugar, cola drink infused with a taste of fairy floss. It joins Vanilla and Raspberry in the Pepsi Max flavour range.
NEWS
Scrutiny on Bellamy’s takeover
BELLAMY’S Australia has entered a Scheme Implementation Deed which will see China’s Mengniu Dairy Company acquire 100 per cent of its issued shares.
The Board has unanimously recommended shareholders accept the offer of $13.25 cash per share. It would see $12.65 cash per share from Mengniu and 60 cents per share fully franked special dividend paid by Bellamy’s.
The cash amount values Bellamy’s equity at approximately $1.5 billion, which represents an enterprise value 30 times the reported normalised FY19 EBITDA.
Chairman John Ho said: “The proposed Scheme is an attractive all-cash transaction at a 59 per cent premium to the prevailing share price. It reflects the strength of the Bellamy’s brand, the dedication of 160 passionate employees and the progress of our turnaround plan.”
Bellamy’s CEO Andrew Cohen said: “Mengniu is a pre-eminent dairy company in China and an ideal partner for our business. It offers a strong platform for distribution and success in China, and a foundation for growth in the organic dairy and food industry in Australia.”
Mengniu’s CEO Jeffrey, Minfang Lu said the company had a track record of supplying high quality organic products and its leading organic brand
position along with its local operation and supply-chain were “critical to Mengniu”.
China Mengniu Dairy Company operates as a holding company which, through its subsidiaries, manufactures and distributes dairy products in China.
In a December 2017 interview with McKinsey’s, Lu said, “We collect four million tons of milk each year.
“We sell 12 billion packs of product to our consumer, and we have 58 manufacturing sites, more than 1000 manufacturing lines, more than 2000 SKUs.”
Bellamy’s FY19 was a “challenging period” due to regulatory changes, a lower birth rate and increased competition for Chinese demand, the company said when it announced its results.
The challenges saw Bellamy’s full-year profit almost halve to $21.7 million in FY19, down from $42.8 million in FY18. Net revenue was $266 million and normalised EBITDA was $47 million (17.6 per cent).
FEDERAL TREASURER
‘NO COMMENT’
Federal Treasurer Josh Frydenberg told Food & Drink Business he wouldn’t comment on the proposed takeover.
His comments followed Tasmanian Senator Peter Whish-Wilson calling on him to investigate the proposal.
Frydenberg told Food & Drink
Business that the government would not comment on specific foreign investment matters.
“Foreign investment is an important contributor to Australia’s economy and standard of living. Australia maintains a non-discriminatory, case-by-case approach to considering foreign investment proposals,” Frydenberg said.
Meanwhile, Greens Senator Peter Whish-Wilson wrote to the Treasurer and Trade Minister Simon Birmingham saying the government must examine (or direct the Foreign Investment Review Board to) whether the bid complied with foreign acquisitions and takeover laws.
Whish-Wilson pointed out Bellamy’s had not been able to get its organic infant formula into China’s retail outlets as it had been waiting on regulatory approval since 2017.
He called on the ministers to examine a range of questions including whether the Chinese Government, by withholding import approvals, had suppressed Bellamy’s share price ahead of a takeover offer by Mengniu.
He also asked whether “any actions by the Chinese Government, including withholding import approvals, constitute a conflict of interest and could reasonably be seen to be market manipulation.
Whish-Wilson called on Frydenberg to find out if “any activity by the Chinese Government in relation to Bellamy’s is inconsistent with the national interest test”.
He questioned what precedents existed for a takeover bid by a foreign company when the nation state was the largest shareholder, and where regulatory decisions by that nation state had a material impact on the target company’s market valuation.”
Whish-Wilson told Food & Drink Business that it was a “sensitive and significant matter of public interest. ✷
www.foodanddrinkbusiness.com.au | October 2019 | Food&Drink business | 5