Page 10 - Food&Drink Business magazine October 2022

M&A COMMENT
Lost brands
The recent sale of Patties and Vesco Foods to Singaporean private equity house PAG, has trade expert David Thomas asking some timely questions.
watch us retreat to our domestic and historical roots. Isn’t it time to embrace the opportunities presented by our geographical location in the Asia-Pacific?
When you consider the rise of more than two billion Asian middle-class consumers in the region and Australia’s large, vibrant, and diverse population of 4.4 million with Asian descent (17.4 per cent of our total population, according to the 2021 census), we have a unique and enviable edge in bridging language, cultural, and communications gaps.
Yet it seems Australians feel more comfortable doing business in London, New York, and Auckland, rather than Hong Kong, Singapore, and Mumbai. If we are not grabbing the opportunities now, then when?
WHAT NEEDS TO CHANGE?
If you are an Australian-based investor, how can you re-evaluate your ROI calculations on Australian brands so as to make a more balanced decision on the merits of investing locally and keeping out the competition?
If you're a leader within an Australian based brand, how can you make yourself more attractive to local investors by building an Asian distribution strategy to grow revenue, scale, and profitability?
If you’re a consultant, intermediary or broker, how can you become more relevant by connecting Australian brands with local investors to build scale, revenue and profits which can be retained in Australia and used to invest in our long-term capabilities to become a dominant player in the Asian region? ✷
✷ ABOUTTHEAUTHOR
THE proposed acquisition of Patties Foods and Vesco Foods by Singaporean private equity firm PAG comes on the back of their purchase of Craveable Brands and chicken processor Cordina Group.
These transactions raise questions in my mind about Australia’s confidence, capacity, and courage to invest and grow its own popular food brands in Asia.
and brand-building capabilities so why aren’t we doing it?
And if, according to Patties Foods CEO Paul Hitchcock, a Singaporean private equity firm can recognise the potential to invest “into market leading innovation, well-known brands and manufacturing capabilities”, why can’t Australia?
As I have written many times before, and is widely recognised
for premium food and beverage products, especially in relation to the full and accurate disclosure of ingredients, sourcing, nutrition, and traceability; and
• our world class processing, supply chain, technology, and logistics which enables Australian products to arrive in Asia within the expected speed for a country with its unique location in the Asia-Pacific region.
With our $3 trillion superannuation pool, together with our $90 billion private equity industry, why are we not investing in our own brands, products, and capabilities to build our own distribution capabilities in Asia, compete with popular Asian brands, and bringtheprofits,dividends,and revenue back to Australia?
It makes me wonder about the future of Australia in Asia. When I arrived in Australia as a migrant in 1995 (albeit English, caucasian, and from the British colony of Hong Kong), I was confident Australia would become a major player in Asia in a wide range of industries, especially in my own area of financial services.
“ Australia has significant capital available to invest into its own food processing, distribution and brand-building capabilities so why aren’t we doing it?”
I have nothing against PAG , which is a leading investment firm in Asia with strong backing, local expertise, and a vision to be a dominant player in the region.
But I wonder how Australia has allowed some of its favourite and most popular brands (for example Four ’n Twenty, Patties, and Lean Cuisine) to fall into the hands of a foreign private equity firm?
Australia has significant capital available to invest into its own food processing, distribution
throughout the world, Australia is highly regarded for its world class premium food, beverage, and other FMCG products for all of these reasons:
• our clean and green environment, free of pollution, clean air and water plus wide-open spaces;
• our unique farming community and culture which is hard-working, efficient, stable and the envy of the western world;
• our highly regulated market
10 | Food&Drink business | October 2022 | www.foodanddrinkbusiness.com.au
David Thomas has a wealth of experience in financial services, business, and investment. He equips business leaders with the knowledge and tools to navigate the cross- cultural challenges involved in doing business in the
Asia-Pacific and helps them develop their own strategy for success in the region. More at www.davidthomas.asia
I have been dismayed to