The graziers spending millions creating our new luxury food

It is early days but sheep graziers who invested millions on creating marbled ‘wagyu lamb’ akin to beef are starting to see their work rewarded at the country’s flashiest restaurants.

Agribusiness investment banker David Williams enjoys some wagyu lamb with Stokehouse executive chef Jason Staudt. Picture: NCA NewsWire / David GeraghtyAgribusiness investment banker David Williams enjoys some wagyu lamb with Stokehouse executive chef Jason Staudt. Picture: NCA NewsWire / David Geraghty

Australian lamb is on track to reclaim its spot as a premium product, finding itself back on the menus of the country’s flashiest restaurants.

While considered a beloved staple around kitchen tables – think of that 1990s advertisement when Naomi Watts turned down a date with Tom Cruise to have one of her mum’s lamb roasts – sheep meat has been treated largely as a commodity product.

Lamb, hogget or mutton are the only choices that Australians have had, until now.

A new niche variety is emerging: wagyu lamb, winning favour among top chefs, from The Stokehouse in St Kilda to Aria in Sydney.

But lamb’s resurgence is yet to reach the dizzying heights of the 1950s – when coupled with a wool boom Australian graziers were akin to royalty, being so wealthy that stories still linger of them ferrying around their sheep in Rolls Royces and Bentleys.

A cutlet of Mottainai wagyu lamb

It is early days and wagyu lamb is considered a bespoke and exclusive product – the ingredients that have propelled it to a luxury food.

West Australian farmer Suzannah Moss-Wright spent $3m on a quest for her lamb to attain similar marbling to prized Japanese Kobe beef – with no guarantee that her experiment would succeed.

But seven years later Moss-Wright, a former lawyer and scientist, is selling wagyu lamb – with 30 per cent marbling, compared with about 4.2 per cent for regular lamb – to high end restaurants, including the Grand Hyatt in Tokyo.

She is now seeking to raise $5m from investors to expand production and sales in the US.

Moss-Wright’s sheep – merino crosses – are fed a diet largely containing carrots and olive oil, which creates a high intramuscular fat (IMF) content in cutlets and chops, creating a similar melt in your mouth experience.

Other graziers on the east coast are following suit, with Gundagai Meat Processors investing millions of dollars in x-ray and probe technology to measure the IMF content in carcasses, paying farmers more money for the higher the grade.

The trend might be enough for Meat & Livestock Australia to reconsider its choice of former AFL footballer Sam Kekovich as its “lambassador” for somebody considered more luxe.

But Moss-Wright says she is not about to “boil the ocean”. “What we do isn’t something that can be done on an industry scale because of the volume of waste and the ingredients that we need and the level of care that we put into it,” Moss-Wright tells The Weekend Australian.

“We’re effectively like the Kobe beef of lamb”.

Suzannah Moss-Wright of Mottainai Lamb spent $3m to create the same level of marbling seen in wagyu beef.

The waste, Moss-Wright refers to sub-standard and by-products she gets from horticulture farmers to feed her lambs. Carrot pomace, a by-product from juicing, unsaleable carrots – even carrot leaves – as well as sedimentary olive oil is collected and recycled into lamb feed, creating a diet that creates a marbling in meat, similar to Japanese Kobe beef.

Moss-Wright calls her lamb Mottainai, a term borrowed from Japan meaning don’t waste what is valuable. To her, the greener way of producing lamb is just as important as the marble score.

And while Moss-Wright says her farming practices would be difficult to replicate at scale, she plans to process up to 50 tonnes a week – the equivalent of 120,000 lambs a year – once the capital raising is completed.

To put that into context, Australia slaughtered 5.7 million lambs in the three months to March 30 alone.

“We’re never going to be an industry-wide solution,” Moss-Wright says.

“We are very much a premium, luxury solution that addresses a sustainability problem.”

In recent decades, Wagyu has expanded beyond Japan where the farming practices to produce that prized marbling and texture almost have a mythical status. Indeed, in Ian Fleming’s James Bond novel, You Only Live Twice, a Japanese herdsman hauls out a crate of beer bottles and tells the fictional superspy to feed his cow one.

Mottainai wagyu lamb being prepared at a restaurant

Japanese chefs are equally fascinated by Moss-Wright’s patent-protected practices and produce. “There’s huge demand and curiosity,” she said.

“They are really interested in the taste and to experiment and it’s really fun when you actually get some chefs together.”

Unfortunately, Australians living on the east coast are not able to sample Mottainai lamb, with the cost of air freight soaring during the pandemic – and remaining expensive – and the collapse of refrigerated logistics giants Scotts meaning there are now fewer cross-country providers.

Instead, Singapore is Moss-Wright’s closest market. “We might as well be in a different country”.

But in the rolling green hills around Gundagai, NSW – a stone’s throw away from the dog on the tucker box monument – the wagyu lamb movement is growing, albeit in its early stages.

Gundagai Meat Processors chief executive Will Barton (centre) with co founders and owners, uncle Tony Barton (left) and father Bill Barton .

Gundagai Meat Processors (GMP) has adopted technology from MEQ Solutions, which has designed a probe to accurately measure the intramuscular fat content. It is among a suite of screening tools that GMF uses on carcasses to ensure they are of a more premium grade.

GMP chief executive Will Barton said the benefits allow lamb to move higher up the value chain, while encouraging farmers to adopt healthier and improved animal welfare practices.

“We’ve developed a scoring system that encourages above average marbling, discourages over fattening and rewards animal health and pays the farmer 80c a kilo extra,” Barton says.

Creating marbling isn’t as simple as fattening up a lamb – too much fat becomes a frustration to chefs when trimming meat and finding they don’t have as much volume as ordered and left with a pile of waste instead. The animal, therefore, has to be lean, with the higher and more flavoursome fat content remaining in the muscle.

For Stokehouse executive chef Jason Staudt, who was the first chef to buy Gundagai’s wagyu lamb, the value of the product is in its consistency.

Wagyu Lamb at Stokehouse, St Kilda Beach. Picture: NCA NewsWire / David Geraghty.

He said he previously wouldn’t put lamb on function menus because of its high degree of variability.

“Lamb in Australia, traditionally through the season as the grass changes, it changes. Sometimes you get really chewy lamb, really tough lamb, unrelaxed lamb… and then the fat levels are different, so it cooks differently,” Staudt says.

“The consistency for me was a no-brainer. The second thing was it aligned with our sustainability. They (GMP) take care of their farmers. If you can get into the top 5 per cent of the herd as a farmer and change your ways as a farmer – not just doing volume but doing it properly – and they get paid a little bit more a kilo, I’m all about that.”

Agribusiness dealmaker David Williams – who has Blackmore wagyu beef cattle on his farmland – said the MEQ probe technology would revolutionise the way lamb is bred and sold, and create new export markets.

He said lamb was changing in a similar way that beef did in the naughties.

“It’s impossible these days to buy a steak in a restaurant without a brand and a marble score. 9+ marble score means a high price and the best breed like David Blackmore wagyu, and even higher price, $100-plus for a steak. 15 years ago, you ordered a cut; a sirloin, T-bone, eye filet etc. Now you order a type of beef, a brand, and a marble score, all great indicators of quality, taste, and tenderness,” Williams said.

“Lowly lamb is still referred to on restaurant menus and in Coles as lamb chops/cutlets/roast. But the world is changing in front of our eyes.”

Meat & Livestock Australia chief executive Jason Strong – who has sent two lots of his own lamb to Gundagai Meat Processors and made changes based on the feedback he received from the screening technology – said it’s a prime example of moving agriculture further up the value chain.

“I think the opportunity for red meat as a part of a balanced diet is significant. And we‘re seeing the benefit from that in both beef and lamb. But as those first products continue to become more expensive, because it’s high quality, and the demand is there for it, you’ve got to meet people’s expectations,” Strong says.

“So having a higher quality, more consistent product is going to be an essential component of maintaining and improving market share and value with consumers.”

From plans to import beluga sturgeon to harvesting Murray cod, Australia’s next luxury food

Aquna Murray Cod chief executive Ross Anderson. Picture: Luis Enrique AscuiAquna Murray Cod chief executive Ross Anderson. Picture: Luis Enrique Ascui

Griffith – the heart of the NSW Riverina – punches above its weight when it comes to serving up Australian culinary delights.

It is home to McWilliam’s Hanwood Estate, known for its $20 bottle of classic tawny port. De Bortoli’s Riverina base is a stone’s throw away in Bilbul. Then there is the region’s illicit past of producing cannabis among the orchard trees.

But now lurking in ponds closer to town is Australia’s only farmed Murray cod.

The fish’s white flesh, which has none of the earthy taste of the wild cod, has won praise from chefs across the country from The Atlantic in Melbourne to Aria in Sydney – and even overseas with celebrity chef Heston Blumenthal endorsing the brand.

And it is those chefs who have sparked demand for another Australian first product: Murray cod caviar.

Australia is eager to develop a homegrown caviar industry and the federal government is beginning public consultation to potentially allow for the live importation of sturgeon.

Salmon producers have also been getting in on the act. Their fish produce a glossy red roe that’s larger and has more pop than the fine black balls of Caspian varieties which Russia has traditionally dominated.

Ross Anderson, the chief executive of ASX-listed Aquna Murray Cod, believes caviar produced from what is often cited as Australia’s national fish will sit somewhere in between, in terms of pricing and prestige.

Aquna is launching its own range of caviar, which will initially be available to chefs in the wholesale market before branching out into retail.

While it is a niche product, with production in the hundreds of kilograms versus thousands, it allows Aquna to extract more value from its Murray cod.

“It can double the return we get out of a female fish,” Mr Anderson said.

“It can be anywhere from a 50 to 100 per cent increase in the value of the fish, depending on the spawning and the size of the fish as well.”

A tin of Aquna Murray Cod caviar.

Therefore, producing Murray cod caviar may seem like a no-brainer for Aquna. But when it considered the move, the company – which listed on the ASX 12 years ago – faced a problem.

To grow caviar, Mr Anderson and his team needed to sex its fish, holding back females so they could grow to a sufficient size, so their meat and roe could be harvested at a commercial scale.

Aquna has been struggling to fill demand for its Murray cod and has withdrawn from some international markets, including Japan and Europe, as it builds new ponds and works to increase supply, which it forecasts will hit 10,000 tonnes a year by 2030.

“One of the changes we made was we went through the process of sexing the fish and holding back females, which has actually contributed to a shortage of fish over the past 12 months,” Mr Anderson said.

“But, it (caviar) is really fitting with our idea of sustainability and value adding because we’re using more of the fish. And it fits in with the idea of Aquna being a luxury food brand.”

International restaurateurs are increasingly valuing Australia’s ability to produce luxury food that matches or exceeds traditional markets. For example, Australian-grown black truffles are finding their way on to the menus of Michelin star restaurants in Europe, where their “down under” provenance is celebrated and commands a premium.

Celebrity English chef Heston Blumenthal at the Aquna fish farm.

As Mr Anderson opens a jar of champagne-coloured Aquna Gold caviar, he knows the product has similar potential but is not getting ahead of himself.

“We’re going to take it one step at a time. The first step is to introduce it to the Australian market and let them say what a beautiful, high-quality product that it is,” he said.

“Then have some international visitors taste it and see what it’s like, and then over time as it develops and grows we can introduce it to the world. We’re going to take baby steps before we try to run.”

Aquna’s caviar project began when Lisa Downs, a sales manager at top caviar importer and distributor Calendar Cheese, saw some chefs serving Aquna’s cured roe and fish. She then approached Aquna’s head of business development, Ian Charles, at the Boston Seafood Expo a couple of years ago about a partnership.

Agribusiness deal-maker and corporate adviser David Williams believed Murray cod caviar had potential. Mr Williams advised Canadian seafood giant Cooke in its $1.7bn takeover of Tassal last year and has been promoting the importation of sturgeon caviar.

“It (Murray cod caviar) is a value-added product that will be highly valued among chefs to be served alongside salmon roe,” Mr Williams said.

Agribusiness banker David Williams expects Murray cod caviar to be “highly valued”. Picture: Nicki Connolly

Earlier this year Mr Williams said 2023 was all about bringing caviar to a wider audience, with the $300 jars of the product – synonymous with luxury and extravagance – being previously off limits to all but the very wealthy. Now he says it has surpassed yellowtail kingfish as the on trend entree.

“It’s everywhere in bite-sized, affordable dollops,” he said, adding that Qantas even served it on a flight to New York earlier this year. “Caviar is the new black,” he said.

Despite appetites for caviar increasing, Russia’s invasion of Ukraine – which now spans more than 500 days – has disrupted global supply. Western countries have banned Russian caviar imports and another of the country’s specialities, vodka. While most Russian caviar is consumed by Russians, in 2021 the European Union alone imported about 1.7 million euros ($2.8m) of caviar from Russia.

Now, citizens on the continent are banned from having a dollop – opening the door for producers of sturgeon caviar. Italy, France and Poland as well as China are ramping up supply – as well as alternatives, such as Aquna’s product.

Overall, the global caviar market is worth about $US276m ($400m) and that is expected to soar to $US1.88bn in the next five years with an annual growth rate of 9 per cent, according to Market Data Forecast.

For Aquna it cannot bring on extra supply of Murray cod caviar flesh and caviar soon enough, as it experiences wild swings in its share price. While its stock has surged 11.5 per cent to 14c in the past month, in the past year it has fallen more than 34 per cent.

Its revenue jumped 25 per cent to $6.1m in the six months to December 31, and the company cited more fish available to be sold and at a higher price per kilogram.

Meanwhile, it slashed its half-year loss from $3.04m to $365,000. Retail prices for Aquna’s Murray cod are around $65 a kilogram – almost twice that of salmon.

Aquna sustainable Murray cod farm at Griffith. Picture: Luis Enrique Ascui

The company now has 50 ponds and plans to build another 79 – 50 of which will be commissioned this year.

“They won’t all be grow-out ponds, some of them will be juvenile ponds,” Mr Anderson said.

“So as time goes forward we will move into this free-range model with our fish, and more and more of our ponds with pens in them will turn into ones holding juveniles.

“Production looks great ahead of us. We have a lot of fish in the water. But our problem is that it takes two years to grow a fish.

“So, while we have many, many fish in the water we don’t have enough saleable sized fish to supply demand at the moment.”

And he expected the conundrum to continue, even as the company rapidly commissions more ponds.

“If you look at a fish like salmon, more than four million tons of it is produced in the world every year and it all gets eaten,” Mr Anderson said.

“If you look at Patagonian toothfish, last year there were 24,000 tonnes of that harvested and it all gets consumed at premium prices.

“So what the cap-out demand for us is with our pricing, I don’t know yet; but we’ll push it all the way until we find that out.”

Bubs to spend more than $1m on China registration – after trying unsuccessfully since 2019 to woo Beijing

Goat milk-focused infant formula company Bubs will spend more than $1m in an effort to register its factory in Melbourne with Chinese authorities but concedes there is no guarantee that it will gain Beijing’s approval.

Bubs, led by chair Katrina Rathie, is facing increased pressure from shareholders in the lead up to a vote on a board spill later this month, spearheaded by founder and sacked chief executive Kristy Carr and former executive chairman Dennis Lin.

The current board presented their case to shareholders on Thursday, releasing the findings of a strategic review, which condemned Ms Carr and Mr Lin’s China strategy and outlined a five step plan to turn the company around.

Corporate restructuring specialist McGrathNicol and agribusiness investment banker and advisor David Williams assisted the board with the review.

The five-step plan includes ditching a joint venture to produce infant formula in China for the Chinese market and seeking to register its factory in Melbourne with Beijing instead. This would allow the company to access China’s general retail, including mother and baby stores, which account for 80 per cent of the country’s infant formula market.

But former A2 Milk Asia Pacific boss Peter Nathan and ex-Elders deputy chair James Jackson – who Ms Carr and Mr Lin have proposed as Bubs’s next chief executive and chair respectively – criticised the plan. They said Bubs has tried to gain Chinese approval under SAMR rules since 2019 without success.

“The Bubs strategy presentation today was light on detail and provided little in the way of strategic insights or differentiation,” Mr Nathan and Mr Jackson said in a joint statement.

“ The strategic pillars are unchanged from previous management and supported by the then Board. There is sadly so little to show after three months of review and the engagement of expensive external advisors. This is a great disappointment for all shareholders.”

Non-executive director Reg Weine – who oversaw the review – said the SAMR process was risky and expensive.

“We know it will not be easy. But with geopolitical tensions subsiding and considerable investment we have already made in our manufacturing site, we owe it to our shareholders to explore the registration so we can tap into the 80 per cent of the China market that we are not currently in,” he said.

Mr Weine said its Melbourne factory is only running at 31 per cent capacity, which he said was “terribly inefficient from a cost and overhead perspective”, creating further need to produce what is known as China label product in Australia.

Interim chief executive Richard Paine said it would cost more than $1m to seek approval from Beijing to sell its Australian produced infant formula in China’s general retail market – a process he said was risky.

Managing Director of Kidder Williams, David Williams, assisted Bubs’s board with its strategic review. Picture: NCA NewsWire / Ian Currie

“Without going into costs, it’s certainly in the order of probably $1m or more in order to undertake a registration process for each individual slot. There three slots available for each manufacturing site, so that would be something that board will need to consider very carefully because that obviously involves a considerable outlay of investor funds,” he said.

Bubs is betting on its “refreshed” China strategy, which includes seconding Jackie Lin – no relation to Dennis Lin – from Alibaba-backed private equity firm C2 Capital to run its China business. C2 is Bubs’s biggest shareholder, owning about 10 per cent of the company.

Jackie Lin fielded questions from investors on Thursday, saying he heard “lots of good stories about Bubs on the ground” from consumers in China. “We’ll need to strategically invest in this,” he said.

Mr Weine said developing the “USA growth engine” was the first step on the five-point plan, after the company obtained temporary import approval from the Food and Drug Administration last year. The China reset was No.2, followed by “portfolio optimisation”, “sweat the assets” and bolstering “working capital”.

“The USA is going incredibly well. It is our growth engine and we expect to see sales more than double in FY24,” he said.

US President Joe Biden speaks with Kristy Carr, former Bubs chief executive, last year.
US President Joe Biden speaks with Kristy Carr, former Bubs chief executive, last year.

Bubs is expecting to deliver annual sales of $80 million this financial year – a 35 per cent jump on FY23 – and a gross margin of 40 per cent. It is forecasting to become cashflow positive by FY25.

It has already cut its “monthly cash burn” from about $5m to $2m. Ms Rathie, who did not speak on the investor call, said in a statement: “The board is confident that we now have the right governance structure and operational teams in place and have identified the key people and strategic partners to execute with precision to deliver strong and profitable growth”.

Bubs Australia brings in Kidder Williams, seeking strategic advice

Kidder Williams, the high-profile Melbourne deal makers specialising in agribusiness and food, have been drafted in by the board of Bubs Australia as the company reworks its market strategy in a bid to save its share price.

There’s been plenty of instability at infant formula producer Bubs, with the departure of its former chairman, Dennis Lin, and chief executive, Kristy Carr, this year. Both Lin and Carr are part of a push to remove the current board, led by ex-King & Wood Mallesons partner Katrina Rathie.

New Bubs chairman Katrina Rathie. Louie Douvis

Bubs shares are down more 75 per cent over the past year, or 45¢, and last traded at 14¢.

The company is undertaking a strategic review, with a focus on its strategy in China. The view internally is that, under Lin and Carr, the company built up extensive unsold inventory due to arrangements made with its Chinese distribution partner, AZ Global.

David Williams, the managing director of boutique corporate advisory Kidder Williams, will take the lead advising Bubs.

Williams has dominated the agribusiness sector for 30-plus years, most recently being helping Pure Foods Tasmania kick-start growth. He was also on defence at Tassal last year before the salmon producer was acquired by Canada’s Cooke Aquaculture in a $1.7 billion deal.

Sour milk

The appointment comes after a period of turmoil at the infant formula company, which publicly kicked off in May after the removal of Carr as chief executive due to her failure to “comply with reasonable board directions”. Lin’s employment with Bubs also was terminated with immediate effect.

The sudden move represented a change in view by the board with Bub’s share price under significant pressure and the company’s key China business posting slower-than-expected sales.

Since then, Carr has begun leading a group of dissident investors who plan to spill the board and install a former a2 Milk executive, Peter Nathan, to lead the infant formula manufacturer. Bubs co-founder, Anthony Gualdi, and the company’s largest customer in China, AZ Global, are also involved in the push to roll the board. Their combined holdings tally just over 5 per cent, sufficient to call, earlier this month, for an extraordinary general meeting.

Rathie, in an interview with The Australian Financial Review, has already accused Bubs’ former management of placing “a lot of eggs in one basket” with AZ Global.

“They effectively gave control to AZ Global and its affiliates, despite the very strong stated concerns of the non-executive directors,” she said this month.

David Williams is working with Pure Foods Tasmania to boost its brand

David Williams managing director of Kidder Williams. David assisted Canadian company Cooke to buy Tassal and is now working with Pure Foods in Tasmania. Picture: Nikki Davis-Jones
David Williams managing director of Kidder Williams. David assisted Canadian company Cooke to buy Tassal and is now working with Pure Foods in Tasmania. Picture: Nikki Davis-Jones

A key player in the success of Tassal hopes to give another Tasmanian business a leg up to global success, and he says the salmon farmer’s story could help other businesses realise their full potential.

Pure Foods Tasmania owns several Tassie food brands including Woodbridge Smokehouse Daly Potato Co, The Cashew Creamery and Laud’s Plant Based Foods.

Pure Foods Tasmania managing director Michael Cooper said the company had been growing well organically.

“One of our factories is about to move to 24-hour production,” he said.

“It is easy to sell Tasmanian produce as it has that DNA of the purest and finest you can find.”

He said the company was looking at other acquisitions.

“We are always looking to grow both organic and through acquisition; we are currently working on a couple of opportunities and is why we engaged Kidder Williams to help execute a good acquisition,” Mr Cooper said.

Tassal's Tinderbox lease. Picture: SAM ROSEWARNE.
Tassal’s Tinderbox lease. Picture: SAM ROSEWARNE.

Kidder Williams managing director David Williams has been involved in the salmon industry for more than 20 years and more recently, he facilitated the deal between Tassal and Canadian company, Cooke Aquaculture.

“When it went into receivership 12 years ago, I decided to buy it … I knew a lot about the industry and I bought it for $42.5m,” Mr Williams said of Tassal.

“I laugh that I just bought it again for a second time in December (last year), for Cooke in Canada for $1.7bn.”

Mr Williams is now working with Pure Foods to help grow the company.

“I’ve got a philosophy that people have never made enough out of Tasmania,” Mr Williams said.

“You don’t need to look any further than what happened with Tassal.

“There’s plenty of other companies that should be based here and should diversify geographically and species-wise, I say that for the oyster industry and the mussel industry.”

Daly Potato Company is owned by Pure Foods Tasmania. Picture: SAM ROSEWARNE.
Daly Potato Company is owned by Pure Foods Tasmania. Picture: SAM ROSEWARNE.

Mr Williams said there were some problems holding Tasmania back.

“Historically, there’s two big problems with Tasmania … the state itself hasn’t done enough business development,” he said.

“The second thing is people need to use this as a base to grow … for example if you’re doing oysters and you’ve only got one site, you’re really high risk.

“That’s why Tassal went broke by the way, we had warm water coming down the East Coast and the fish weren’t feeding.”

Tassal salmon pens, in Macquarie Harbour, Strahan. Picture: MATHEW FARRELL
Tassal salmon pens, in Macquarie Harbour, Strahan. Picture: MATHEW FARRELL

He said creating farms in other regions helped Tassal become successful.

“If the water was warm, or if you had an algal bloom or if something else went wrong, you could take the fish from somewhere else and still be able to supply Coles and Woolies,” Mr Williams said.

“You need to be able to supply 365 days … you need protection over weather events, algae events, all sorts of diseases.”

Mr Williams said there were few companies in Tasmania that had reached a high level of success.

“I think down here, apart from Tassal and Huon, there isn’t anybody that’s really grown a massive business, but there’s the possibility to do it,” he said.

“If the story’s right for Pure Foods, I think we can make a nice little company out of this.”

Chinese attention is returning to Australian Agriculture investment, says David Williams

goFARM Australia managing director Liam Leneghan, Nuveen Natural Capital head of APAC and Africa Kristina Hermanson and Kidder Williams managing director David Williams at the forum. Picture: Arsineh Houspian
goFARM Australia managing director Liam Leneghan, Nuveen Natural Capital head of APAC and Africa Kristina Hermanson and Kidder Williams managing director David Williams at the forum. Picture: Arsineh Houspian

Chinese investors are taking an increasingly active look at Australian agricultural investments now that the Foreign Investment Review Board’s door has partly reopened to proposals from China, according to David Williams, director of advisory firm Kidder Williams.

Mr Williams told The Australian’s Global Food Forum this week that Chinese investors were back looking at assets in Australia, including agricultural investments, given a perceived change in stance from the Foreign Investment Review Board.

He said FIRB’s decision in January to allow one of China’s biggest textile manufacturers, Jinsheng Textiles, to buy Gundaline station, an irrigated cotton farm in the NSW Riverina, was seen as a sign of the political willingness to reopen the door to Chinese investors for some assets.

Global Food Forum
Australia's place at the table
Logo Picture: Supplied
Global Food Forum Australia’s place at the table Logo Picture: Supplied

“One of the bright spots (on the agricultural investment scene) is that the Chinese are back,” he told the forum. “They’re back because the Foreign Investment Review Board’s got the door slightly ajar, and we are going to see a fair bit more of that (like the Jinsheng cotton farm) in the next six months.

“There’s bit of it going on now.”

FIRB’s review process has opened up since the Covid pandemic, when all major foreign deals had to be referred to the review board.

Chinese investors were wary of investing in Australia under the Morrison government, due to political tensions.

An approach by China Mengniu Dairy to buy Lion’s dairy and drinks business in a $600m deal was blocked in August 2020 by Treasurer Josh Frydenberg, who said it was “contrary to the national interest”, despite reported approval by FIRB.

In January 2021, Frydenberg blocked a proposed $300m deal for the China State Construction Engineering Company to buy building contractor Probuild from its South African owners.

The improvement of political relations between Australia and China under the Albanese government has seen Chinese investors reconsidering Australia as a place to invest. Chinese officials have raised the treatment of investment proposals with Australian government officials in negotiations over repairing some trade relations. The Chinese government has removed some unofficial restrictions on Australian exports to China, including coal and timber.

The agricultural sector is also closely watching negotiations over tariffs imposed on Australian barley and wine which are currently under way.

There are hopes the tariffs could be lifted before Prime Minister Albanese’s expected visit to China in October this year.

Mr Williams said FIRB had come under criticism in the recent past because of the “lengthy” time taken to approve deals and the high costs involved.

But he said things had changed more recently.

He did not think Chinese investors would get approval to buy critical infrastructure such as ports, airports or power stations.

But he said that there were still restrictions on Chinese companies and individuals getting their money out of China, with much new interest coming through Hong Kong channels.

There is also keen interest in Australian agricultural investors from other foreign investors such as Canadian pension funds and US university endowment funds.

Minter Ellison executive director of international markets Paris Zhang told the forum that Chinese investors were “continually looking” at investments in the agricultural sector in Australia.

“Chinese consumers really like Australian food products for its premium quality, for being clean and green and environmentally friendly,” she said. “Therefore investors are continuously looking at opportunities in Australia in farming including cattle and dairy farms, cotton farms, and farms growing fruit and nuts as well as processors of dairy and cheese.”

She said they were looking for well established or premium brands.

Kidder Williams aims to turn Pure Foods into the next Tassal

Pure Foods Tasmania says it has aspirations to become as successful as Tassal, the last major locally listed aquaculture company until its sale to Canadian firm Cooke for $1.1 billion last year, as it eyes fresh acquisitions in a bid to grow tenfold.

The company’s chief executive, Michael Cooper, said the group aims to reach $100 million in annual revenue, a step-up from the $10 million it is now generating.

Pure Foods Tasmania CEO Michael Cooper (left) and investment banker David Williams, MD of Kidder Williams. 

“We’re not going to get there through organic growth,” Mr Cooper said, adding Tasmanian Pure Foods was closely assessing a buyout.

“We’ve got one on the radar now, we’re doing due diligence,” he said.

Mr Cooper said the company may seek to jump from its purely Tasmanian roots to the mainland in future acquisitions.

“If we exhaust all Tasmanian opportunities we definitely would,” he said.

Sales have been climbing sharply after the group’s tubs of Daly Potatoes & Gravy were stocked in Coles supermarkets in Victoria and Tasmania in March, and in Woolworths in Queensland and Tasmania in April.

“It’s blown our doors off with our volumes,” he said.“Considering the economy at the moment, it’s perfect timing”.

The company has appointed investment bank Kidder Williams to guide its expansion plans. Kidder Williams managing director David Williams said bigger scale was important for Pure Foods Tasmania, which aims to be on the front foot in consolidation.

“Down here, there’s plenty of room for scale,” he said. The company was in the sweet spot in its categories with its gourmet range and strong links to the local supply chain.

“One of the megatrends that people overlook is provenance,” Mr Williams added.

Mr Williams led a syndicate two decades ago which acquired the Tassal salmon business when the company went into receivership owing money to ANZ. It was subsequently floated on the ASX. In 2022, he was an adviser to Cooke in its purchase of Tassal.

Pure Foods Tasmania’s share price has been struggling, falling 2 per cent, or 0.3c on Monday to close at 13c. Shares have fallen 56 per cent in 12 months.

A former Tassal executive, Phil Excell, has been hired as the company’s new chief financial officer.

Mr Cooper said there may be some rationalisation of the businesses in the Pure Foods Tasmania portfolio as the growth plans are stepped up.

“You can’t be all things to everyone,” he said.

Exports constitute about 20 per cent of the total sales, with Hong Kong an important market for its vegan ice-cream made with a cashew base, that is gluten and dairy-free.

The company also operates the Woodbridge Smokehouse salmon business, Tasmanian Pate and Lauds plant-based foods.

Mr Cooper said inflation in input costs appeared to have passed its high point.

“I think we are definitely passed the peak,” he said.

But transport costs were still high and a shortage of truck drivers was adding to the headaches in logistics caused by the collapse of the Scott’s Refrigerated Logistics business.

Mr Cooper said the Pure Foods Tasmania ranges covered the premium end, the middle ground and the value end and would be able to withstand a tightening of spending by consumers.

He said a new product under the Daly Potato Co. brand of vegetables in a meal tray was being rolled out in IGA supermarkets and had been well received by shoppers looking for value, in its early days on the market.