Foreign investment in agribusiness in Australia is becoming more restricted.
During 2011, the Australian Foreign Investment Review Board (FIRB) has stepped up its scrutiny of foreign acquisitions of agricultural assets. FIRB increasingly requires more information on the impact of an acquisition on Australian employment, benefits to local companies, market concentration and the benefits to local communities and consumers. The increased restrictions are not the result of any change in Australia’s foreign investment laws, but reflect community and political concerns about the level of foreign ownership, food prices, and food security.
In the most recent development, on 6 July 2011 a Committee of the Australian Senate announced an inquiry into the growing interest of foreign companies and government agencies in agricultural land, and the way in which FIRB deals with proposed acquisitions of agricultural land. This is not the first time the Senate has examined the practices of FIRB, but this further enquiry suggests the issue of agricultural land is gaining increasing political traction at a time of heightened international interest in Australia’s food production assets, and a number of political figures have called for tightening of Australia’s laws. The Senate inquiry was in part triggered by the acquisition of a number of farms in Australia by Chinese state-owned company, Shenhua Watermark.
Norton Rose Group are experts on Agribusiness investments into Australia, and on the optimal approach to FIRB for foreign investment approvals. If you would like a confidential briefing on these issues please contact: Charles Desmeules.
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