The food industry we knew in 2019 is gone and is never coming back.
Try as companies might to recreate the success of years past, there is a new normal and it has changed the industry forever – think QR codes, think distancing, think vaccines.
Many companies have not acknowledged a permanent change and are unprepared.
Take farmers, for example. How will they pick their produce if international travel continues to be limited? The fruit on the vine over several seasons will be well and truly spoiled by the time backpacker labourers return.
If we could have planned we would have thought increased mechanisation, new varieties, protected cropping, new geographies, and new labour models.
We didn’t see the need for planning and I fear many still do not.
There needs to be a new way forged; company boards need to understand why we are never going back, then embrace what has happened and a new future.
It sounds perverse, but many good things have come out of the pandemic and have changed food and agriculture forever, not least the impact it has had on consumer preferences, buying habits and technical competence.
Most people now see that:
JobKeeper has proved that everyone needs a living wage for a vibrant economy;
universal health care is good for the whole community if for no other reason than to protect ourselves;
we must trust science and need it to help plan ahead, such as new research on multiple and mixing jabs;
there are benefits in planning instead of just responding – in government and in running our businesses;
technology can help us – we need more automatisation, digitisation and artificial intelligence;
we need a better appreciation of the benefits of human interaction – the euphoria of being at home has worn off and we need others so we can interact and get better work outcomes;
we need to help our own and neighbouring countries even if we don’t like their politics, because we are all interdependent.These new ways of looking at the world are here to stay and Covid’s continued threat will reinforce them – the gate back to 2019 is slammed shut and it can’t be forced open.
Covid-19 has delivered the good, the bad and the ugly for food and agriculture. Companies need to recognise this and then embrace the future. Here is my road map:
Good
Collaboration like never before has brought multiple vaccines to market in record time. This is proof for the food industry that there are advantages to collaborating with companies and researchers for efficiency, gut health, waste and food distribution.
Long-term permanent lifestyle changes need to be catered for, such as the re-emergence of breakfast leading to new cereals, and new product development for at-home dining for all meals.
The improved digital fluency of the population – not just QR codes – means a proliferation of online opportunities even with the aged. Shopping from home and new ways of engaging with customers have given a significant shot in the arm for domestic and overseas sales and opportunities.
“Buy now, pay later”, and other iterations, allow customers the flexibility they want for their monthly budget management and does not require a credit card, making online direct consumer sales easier to generate.
Bad
Privacy is out the window with tracking apps and the like, while data security has and will become a major issue.
Tech companies aren’t the only bad boys, so, too, are governments and all sorts of corporations.
While we accept this intrusion for the moment, we need to watch it doesn’t become permanent.
This is a double-edged sword for food companies keen to tap the online market and build an online presence using data analytics.
Food service, hotels, pubs and clubs are down, which means waste is now more prominent in homes, so packaging will be a major issue for food companies.
Ugly
Boards need to focus on protecting the workforce with things such as air filtration, physical barriers and the reconfiguring of facilities for distancing.
Boards should consider getting staff vaccinated now and incentivising them to do so.
We will continue to see hybrid work-from-home models. This is an area that has generated the most discussion and care needs to be taken to stop “goofing off” and deteriorating performance.
Many jobs can’t be done from home, while others need interaction with colleagues on an ad hoc basis.
Supply chain challenges for out of stock and new markets have been found wanting. This is more complex than out of stock on shelves, it is a problem as FMCG companies go to food service or direct to customer.
Where to from here
Redesign factories and offices for air filtration and social distancing. Workplaces will need to be made more inviting and work from home properly analysed.
Promote and increase mechanisation and make labour more efficient, from fruit harvesting to manufacturing.
Look at collaboration opportunities with other companies, research houses and universities. Get more relaxed about sharing intellectual property.
Consider promoting online and artificial intelligence to get to new markets and customers.
Refigure the supply chain for retail/ food service or direct to customer, alone or in collaboration.
If you can put all this on the next board agenda, you will be well on the way to planning for the next wave and acknowledging the food world has changed forever.
David Williams is founder of corporate advisory firm Kidder Williams.
Friday’s vote by shareholders of Coca-Cola Amatil to accept Coca-Cola European Partners’ $9.8bn takeover will mark the end of an era, as yet another Australia-based food business is bought by a foreign company.
But in this case, as the company’s former chief executive Terry Davis points out, the deal may also help the local business by putting it together with a much larger European Coca-Cola affiliate, the London-based Coca-Cola European Partners.
Once one of the top 10 ASX listed companies, the company can trace its roots back to 1904 when it was founded as the British Tobacco company.
It expanded into the drinks business, steadily buying up local Coca-Cola bottlers, starting in 1964 when it bought Coca-Cola Bottlers (Perth). It listed on the ASX in 1972.
Over time, it expanded further into soft drinks, buying up more local Coca-Cola bottling groups and expanding as far as Europe and then into Asia and the Pacific.
In 1989 it sold what was then the WD & HO Wills tobacco business to British American Tobacco, concentrating purely on the food and drink business.
Coca-Cola Amatil’s soft drink operations extended to Kiev in Ukraine in the 1990s.
Around the same time, the Atlanta-based Coke bought its 30 per cent stake in the company.
The local group’s sometimes ambitious overseas expansion plans have had a chequered history, always sounding logical at the time, but never delivering the hoped for returns.
At one stage, in the 90s, the Australian company had Coca-Cola bottling operations in some 17 different countries, including Poland, Austria, Switzerland, Serbia and other parts of Europe.
But over time most of these were either spun off or sold, always proving much harder to make profitable and largely too much of a management challenge for an Australian-based company.
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That said, the company is now roughly the world’s fifth-largest Coca-Cola bottlers group, with a turnover of some $5bn and a portfolio of household drink brands with operations in Australia, New Zealand, Indonesia, Papua New Guinea, Fiji and Samoa.
But in recent years its local shareholders have faced constant challenges for growth. The company has sold out of its operations in South Korea and the Philippines and in more recent times, under Alison Watkins, has sold down its interests in Indonesia.
Davis’s bold plans to expand into fruit and fruit juice with the $700m bid for SPC Ardmona, aimed at expanding its footprint in healthier products, proved disastrous, with the business sold off for a fraction of the price to private investors in 2019.
Coca Cola Amatil managing director Norbert Cole (left) and chairman Dean Wills at the company’s 1997 AGM.
Observers have always sensed there has been an institutional tension, with Atlanta-based Coke wanting a strong focus on selling its products, while the Australian company was keen to diversify into products such as alcohol, fruit, fruit juice and coffee as it looked for expansion.
Some say Atlanta has never been comfortable with the combination of soft drinks and alcohol although Davis disputes this, saying that there are other soft drink groups around the world which also sell alcoholic drinks.
He also argues that there are many similar customers for both soft drinks and alcoholic drinks.
But there are institutional limits to what management can do with any diversification plans.
And some argue that, looking ahead, “ESG” pressure may see the Coke business look at more separation from alcohol.
While moves made by the local company ad to be approved by Atlanta, the relationship where the US company held just over 30 per cent allowed it to have a strong say in its growth plans.
Concerns about sugar-based soft drinks, given the global worries about obesity, and a fiercely competitive local market, had created constant headwinds for whoever is leading the company.
Its growth in Australia has been slow, with analysts not seeing a major upside as a listed ASX company.
There is a view that Atlanta, at the least, has been a strong supporter of the bid, which will see two off its major offshore distributor arms come together.
Some believe that its desire to have more of a say in how the Australian operations were run may have been a factor behind the deal going ahead on the first place.
The CEO of Coca-Cola European Partners, Irishman Damian Gammell, is a veteran of the offshore Coca-Cola business.
CCA’s purchase of SPC Ardmona proved to be a misstep. Picture: Stuart McEvoy
He started in the Irish business in 1991, before moving to Russia, where he was CEO of operations until 2004. He then moved to Sydney and later back to Europe, running the Coke business in Germany for five years.
The company he now runs was formed from a merger of the three main Coca-Cola bottling companies in Western Europe in 2016, and was listed in London in 2019.
In short, Gammell is a veteran of the business with a long history of combining the challenges of dealing with Atlanta and representing local bottling interests.
Current CCA CEO Alison Watkins. Picture: Adam Yip
The deal represents another major step in the consolidation of the global Coca-Cola brand.
As the Australian Shareholders Association’s Roger Ashley points out, Atlanta’s strong support for the deal means that Australian shareholders have little option but to accept the offer.
Investment banker and agribusiness specialist David Williams said the deal was part of a global trend for internationalisation of the food and drinks business.
“In some way, it makes sense for the Coke business to be under a larger umbrella,” he said.
But he worries that as businesses globalise, the keenness to invest in local food will reduce.
Global companies, as he says, look for global brands to promote and are less interested in little known local brands.
He wonders what might happen to some of CCA’s more local brands under its new ownership.
There has been speculation, which has been denied, that Pepsi has also been looking to sell off some of its local businesses.
“We are seeing everywhere a push toward internationalising of brands and jettisoning of local brands,” he said of the industry.
“The consequence is not only the sale of local brands but a withdrawal of funds for business development on a local level.”
Further restructuring will no doubt be ahead once Gammell gets to oversee the Australian business. But for CCA shareholders it is the end of an era.
Amid growing demand for prime grazing country and record cattle prices, investment banker David Williams added another 470 hectares to his cattle property on Melbourne’s northern fringe, which is leased to renowned wagyu beef pioneer David Blackmore.
In recent months the Williamses have increased the scale of Fairfield to almost 2000 hectares, after acquiring two neighbouring holdings known as Roundhill and Brassy.
Roundhill, measuring 300 hectares, was acquired for $2.6 million while the 170-hectare Brassy was bought for $1.7 million. Both deals were negotiated by James Beer of Colliers International.
“Across all sectors, we continue to see strong interest from both buyers that have existing agricultural investments, as well as new entrants,” Mr Beer said.
“Low interest rates and stable earnings are driving demand from both local and offshore investors, and given the current shortage of supply, we expect 2021 will continue to see strong prices across the board.′
Mr Williams’ tenant, Blackmore Wagyu is regarded as one of the country’s top wagyu producers having pioneered the production of 100 per cent Fullblood Wagyu beef in Australia. Blackmore Wagyu beef is served in top restaurants such as Rockpool and Aria and exported to over a dozen countries.
Australia’s wagyu beef is in high demand around the world.
Muirhead, based at Weetalaba near Collinsville, acquired the properties known as Little Ben, Big Ben and Ben View from the Scherf family who had run a successful farming and grazing operation over four generations.
Schute Bell Property’s Phil Evans and Cameron McIvor alongside Landmark Harcourts marketed the Big Ben aggregation.
These two wagyu deals follow London-based Financial Review Rich Lister Sir Michael Hintze paying about $36 million in February for historic Minjah, a 2846 hectare holding at Hawkesdale in Victoria’s Western District.
Minjah was acquired by Sir Michael’s MH Premium Farms, which operates 19 properties across 70,000 hectares in eastern Australia producing prime lambs, beef, wool, cereal, oilseeds, cotton and sugar.
Minjah was offered for sale by Xinjiang Tianshan Animal Husbandry Bio-engineering, which bought it for $25.25 million in 2014 from by lamb exporter Tim Clarke and his wife Jen,
It was established by the Ware family in 1845 and includes a fully restored 1870s bluestone homestead with nine bedrooms.
In this week’s episode of Talk Ya Book we’re joined by David Williams from Kidder Williams. On this extended episode we get his macro perspective on equity markets, as well as fantastic insights on the stories behind Polynovo and Rate My Agent. Proudly presented by Honan (www.honan.com.au).
From ag industry giants and quiet achievers, to backroom deal-makers and world leaders – here are 20 of the biggest movers and shakers making Australia’s $64 billion industry tick in 2021.
THEY are the people who make ag tick — the movers and shakers of Australian agriculture.
From the absolute peak of world trade power, down to those who keep our farms going day-to-day.
This inaugural list of Australian ag’s top 20 power players reveals an industry that has a strong backbone, yet is at the mercy of global politics and a fragile labour system, laid bare by the Covid crisis.
The power players were chosen by The Weekly Times for their influence on agriculture, for how their actions affect the entire industry, and for their ability to make big decisions.
Agribusiness leaders feature prominently, such is their power over their many customers and suppliers, as do the heads of the big-two supermarkets for the same reason.
There are three federal politicians on the list who are responsible for agriculture, trade and environment.
And the state water ministers make the cut, such is their influence on what is the lifeblood of Australian ag.
Global leaders such as Xi Jinping and Joe Biden make the list not just for their positions as superpower leaders, but for their direct influence on Australian ag.
At present it is Jinping’s influence that holds the most sway, with a clear trade war between Australia and China centred on Australian ag. But Biden’s actions towards China may go a long way to changing the Chinese’ tactics.
Braver people than us may rank them in order; we have gone with an alphabetical listing.
But we would like to know what you think of our list.
MARK ALLISON
Elders Limited managing director and Agribusiness Australia chairman
Mark Allison leads Elders, which has prospered during the COVID-19 pandemic. Picture: Supplied
ELDERS managing director Mark Allison dragged one of Australia’s agribusiness icons back from oblivion when he stepped down as chairman to become managing director and chief executive officer in May, 2014.
Shares in the company are now trading at 15-18 times their lowest level, thanks to a series of eight-point plans introduced by Allison.
Elders was one of the few companies which prospered during the COVID-19 pandemic. Its share price is now about 70 per cent higher than it was 12 months ago — a fair indication of its performance.
Allison, a former GrainCorp director, is chairman of AuctionsPlus, sits on a SmartSat Co-operative Research Centre advisory board and Rabobank’s Food and Agriculture Advisory Board and chairs Adelaide University’s Agrifood and Wine Advisory Board.
But one of his most influential roles is as president of Agribusiness Australia.
During the COVID-19 pandemic, he worked with industry leaders to have the Federal Government declare the agriculture sector an essential industry, thereby avoiding the harsh restrictions imposed on other sectors.
He believes some of the challenges for the sector in 2021 will be to encourage exporters to look beyond China for markets if geopolitical challenges persist; ensuring Australian agricultural innovation continues through research and development corporations to boost farm and agribusiness productivity; and ensuring agriculture meets the Australian community’s environmental and sustainability expectations while continuing to increase productivity and being profitable.
THE BACKPACKER
Horticulture farmers, such as stone fruit growers, are particularly reliant on backpacker labour. Picture: Lyndon Mechielsen
NEVER has the influence of the humble backpacker been more obvious than in the past 12 months.
Thousands of Australian farms have found they cannot operate without these young, able bodies who are willing to travel to far flung farming regions for a few weeks’ work to earn a 12-month visa extension.
Their numbers began to fall in March last year when the first wave of COVID-19 hit and have continued to free-fall ever since to an lowest of 53,712 in December, compared to about 145,000 ordinarily in the country at that time of year.
And their presence has been keenly missed, given their exodus has been coupled with that of thousands of Pacific Islanders here on seasonal worker program visas who also returned home to their families.
Horticulture farmers in particular rely heavily on foreign workers to pick their crops and Australians have largely failed to heed state and federal government calls to “wonder out yonder” – as the WA Government so merrily described the often backbreaking work – to head inland and pick farmers’ laden crops following a year of good seasonal conditions.
A register set up late last year to record the financial extent of crop losses due to the worker shortage already tallies $40 million and is expected to increase.
With a vaccine unlikely to roll out across Australia until March, the return of the overseas farm worker looks set to remain just as elusive.
JOE BIDEN
US President
WITH Joe Biden inaugurated as the 46th President of the US last week, the agricultural world now waits with bated breath to see what trade policy directions will be put in place after four years of chaos under his predecessor Donald Trump.
Both former and current Presidents have singled out China as a regional trade pariah.
But a hint at what Australia can expect from President Biden came as late as last week when Treasury Secretary Janet Yellen railed against China’s “abusive, unfair and illegal practices” which included artificially keeping the yuan lower to make its exports more attractive.
Yellen says it is important for the Biden Administration “to work with our allies” in countering China’s influence.
The Australian Government will be hoping it is one of those allies.
The “allies” may not include the European Union, which recently struck an investment agreement with China despite calls from the Biden camp to wait until after the new US administration was installed.
Australia, Britain, Japan, Canada and ASEAN nations are the most likely candidates for an alliance against China.
Through Yellen, President Biden is signalling he wants to be one of the global influencers in agriculture in 2021.
MIKE CARROLL
Agribusiness elder and board director
Mike Carroll, who runs his own beef farm at Derrinallum in Western Victoria, sees addressing the China conundrum as Australian ag’s No. 1 challenge. Picture: Andy Rogers
MIKE Carroll has a breadth of knowledge in corporate agriculture, having headed National Australia Bank’s agribusiness division for six years and serving on a number of company boards.
But he is also well grounded: at the other end of the spectrum, he runs his own beef farm, Widgeegonga Angus, at Derrinallum in Western Victoria, selling cattle into the feedlot sector.
Carroll currently sits on the board of ASX-listed companies Select Harvests and Rural Funds Management, plus Macquarie Group subsidiaries Paraway Pastoral Company and Viridis Ag.
In the past, he has been a director of Elders, Warrnambool Cheese and Butter, salmon producer Tassal and sugar marketer Queensland Sugar.
He has also served on the boards of Rural Finance Corporation and Meat and Livestock Australia and currently chairs the Australian Rural Leadership Foundation.
Carroll sees the No. 1 challenge for agriculture as addressing the China conundrum.
He believes Australia needs to stand by its own values and principles to stare down China, even though it may hurt the agriculture sector.
He says the best tactic is to ignore China and look for alternative markets.
Carroll sees the other challenges as restoration of international faith in free trade and Australia capitalising on the “purple patch” its commodities are currently traversing.
He says the agriculture sector needs to maximise its opportunities during the current boom to set itself up for the inevitable downturn in the cycle.
Senior managing director, Public Sector Pension Fund
Marc Drouin is senior managing director at PSP Investments, which has become Australia’s biggest land and water holder in recent years.
THERE’S few people who have a greater potential to influence Australian agriculture’s landscape than Canadian Mark Drouin.
Drouin is the senior managing director and global head of natural resources with PSP Investments – which manages the superannuation funds of Canada’s public service, armed forces and the 30,000 member-strong Royal Canadian Mounted Police and has bolted into top spot as Australia’s biggest land and water holder in recent years with assets valued well in excess of $3 billion.
In 2020, PSP signed off on one of Australia’s biggest-ever agricultural deals – the $854 million takeover of the ASX-listed Webster Limited, one of Australia’s oldest companies and one of the nation’s biggest landholders. Through its Aurora Dairies business it also paid $55 million for an aggregation of dairy farms around Nambrok, in Gippsland, formerly owned by Gray Wigg Pty Ltd, and $40.4 million for farms near Mt Gambier in South Australia from the ASX-listed Beston Global Food Company.
What Drouin, the former business development boss of global mining company Anglo American, has up his sleeve for 2021 remains to be seen.
BRENT EASTWOOD
JBS Australia president and chief executive
JBS Australia CEO Brent Eastwood runs one of the biggest meatworks/pressed meats companies in the world. He supports company tax cuts to keep people in jobs. Picture: Adam Head
MARKETS move money and what a consumer in far flung parts of the globe might wish to serve up to their family for dinner tonight can greatly influence prices paid at the Australian farm gate tomorrow.
Few know this better than Brent Eastwood, chief executive officer and president of JBS Australia – the nation’s biggest meat processing company which exports product to more than 80 countries.
An offshoot of the Brazil-based JBS – which has evolved over the past 50 years from a humble slaughtering business into the world’s No. 1 meat processing company with more than 150 processing facilities globally – JBS Australia operates 10 abattoirs and five feedlots locally, spread from Tasmania in the south to Townsville, Queensland, in the north.
It has the capacity to process more than 8000 cattle and 21,000 small stock, including sheep, a day and employs a whopping 12,000 staff across Australia.
In other words, it’s a powerhouse with the ability to flick a switch and make for a good or tough day for producers at the saleyards. And, with processors being squeezed by current record beef and lamb prices, the likes of New Zealand-born Eastwood will have plenty on their plate this year.
ROGER FLETCHER
Director, Fletcher International Exports
“I do my share (of calling to Canberra) but only when there is a problem and I have a solution”, Dubbo lamb processor Roger Fletcher says. Picture: David Roma
FEW, if any, would loom larger over a single ag commodity than Roger Fletcher.
The Dubbo lamb processor and his army of buyers are the dominant force in Australia’s sheep meat sector, buying millions of sheep each year to feed Fletcher International Exports’ plants in NSW and Western Australia.
But the modest self-made Fletcher is much more than a lamb trader, processor and exporter. He is now a significant grain exporter and one of Australia’s biggest landowners.
Until recently he owned 20 per cent of Cubbie Station, Australia’s biggest cotton and most controversial farm.
While down to earth, Fletcher is not one to shy away from making his voice heard, particularly over issues that affect his export operations.
“I do my share (of calling to Canberra),” he told AgJournal last November, “but only when there is a problem and I have a solution.”
And as for Fletcher’s worth, as a private family company, that would be anyone’s guess. But rest assured the monetary value would more likely start with a “b” than an “m”.
BARRY IRVIN
Bega Cheese executive chairman
Under the stewardship of Barry Irvin, Bega Cheese has moved to focus more on branded, than commodity, products. Picture: Stuart McEvoy
BARRY Irvin enters his 21st year as chairman of Bega Cheese Limited in 2021.
Irvin has steered the company from a small dairy processor in the town of Bega in southern NSW into the third largest dairy operation in Australia.
As executive chairman, Irvin is integral to the performance of the company.
He is a strategist and works hard to ensure Bega is successful, regularly dealing with bankers, brokers and key institutional financiers.
One of the keys to Bega’s success has been a move to focus more on branded rather than commodity products.
The biggest coup was buying the iconic Australian breakfast spread Vegemite from US food and beverage company Mondelez International for $460 million in January, 2017.
Then late last year Bega bought Lion Dairy & Drinks for $534 million, which included an array of dairy and juice brands, such as Pura, Dare, Yoplait, Berri and Daily Juice Co.
The deals brought forward its 2023 brand targets by at least two years.
For both acquisitions, Bega was able to follow it up with big capital raisings to help pay for the new brands — a mark of confidence in the strategy by investors, particularly institutional investors.
Prior to the Vegemite deal, Bega’s revenue was about $1.2 billion and its net assets were about $328 million.
The revenue is expected to be about $3 billion this year and its net assets about $1.2 billion.
It is now a serious food and beverage player and, accordingly, makes Irvin very influential in the industry.
Like Mark Allison, Irvin also sits on Rabobank’s Food and Agriculture Advisory Board.
The challenge for Irvin is to keep building the business.
XI JINPING
Chinese President
Chinese President Xi Jinping and his government can, and do, profoundly influence Australian agriculture. Picture: Kevin Frayer/Getty Images
WHEN times are good, China’s the best customer Australian agriculture can ask for, to the tune of $14 billion in export trade.
But last year exposed how delicate the relationship with our biggest trading partner really is, and how much our exports are at the whim of President Xi Jinping and his government.
China has consistently not played by international trade rules since it joined the World Trade Organisation in December, 2011, and Australian agriculture has borne the brunt of unfair Chinese trade tactics since it raised the need for a proper investigation into coronavirus in China.
When Australia called for that investigation, China retaliated by banning several abattoirs from exporting and slapped the barley trade with crippling tariffs of more than 80 per cent.
As diplomatic ties between the two nation’s worsened, China retaliated by hitting us where it hurts, with agriculture copping the brunt of its ire: rock lobster, wine, cotton, timber have all been targeted so far, and have been forced to cop either a financial hit or scramble to find new markets.
With China still rejecting pleas from our politicians to “pick up the phone” and talk it out, this situation has the potential to get a whole lot worse for ag in 2021.
MICK KEOGH
Deputy chair, Australian Competition & Consumer Commission
Mick Keogh was previously Australian Farm Institute executive director. Picture: Lyndal Reading
IF YOU’RE a farmer in Australia, chances are the work of Mick Keogh has an impact on how you do things, in ways you may not even realise.
With a lifetime of experience in advocacy and advisory roles, the former Australian Farm Institute executive director is one of the most respected names in agricultural policy, diligently working away on the issues that affect farmers’ day to day.
Keogh was appointed head of the Australian Competition and Consumer Commission’s new agriculture unit in 2016, undertaking key work examining the meat supply chain, wine grapes and dairy industry.
Federal Environment Minister Sussan Ley has been forced to walk a fine line on water policy to satisfy the farming and environmental lobbies. Picture: Sean Davey
THERE’S no denying the political power Sussan Ley holds. It’s rare – perhaps unprecedented – for a federal Environment Minister to hail from a rural electorate so dependent on one of the nation’s most contentious natural resources: water.
Ley has represented the division of Farrer, which abuts the Murray River west from Albury to the NSW-South Australian border and runs north through the key irrigation districts of Deniliquin, Griffith and Hay, since 2001.
While she has held numerous portfolios in cabinet – including health, sport, aged care and education – it was Ley’s appointment as Environment Minister in 2019 that put her on somewhat of a collision course with the bulk of her constituents: farmers that want to see less water allocated to the environment and more diverted toward irrigating their crops, sustaining their local communities and feeding the world.
With the environmental lobby in clear disagreement, Ley has been forced to walk a fine line. She stared down angry farmer calls for the Government to scrap its controversial Murray Darling Basin Plan, which she admits is “not perfect” and needs to be adaptive but is “better than no plan at all”.
Whether her calls from the country can influence significant change in the corridors of power in Canberra remains to be seen.
DAVID LITTLEPROUD
Federal Agriculture Minister
Federal Agriculture Minister David Littleproud is known for his hand’s-off approach: get the settings right, and let the farmers get on with it. Picture: NCA NewsWire / Gary Ramage
WHEN Littleproud was first promoted to Cabinet in 2017, most people had one question: “Who?”
Since then, he’s developed a reputation as one of the Nationals’ best political performers and, after being elected the party’s deputy in 2020, it’s likely just a waiting game until the Queensland MP and former rural banker becomes its leader.
Littleproud was welcomed by the ag sector as having a calmer, more methodical approach to the portfolio than his predecessor and impressed in his early days, such as his initial response to the live sheep export disaster.
He’s known for advocating a hands-off approach: get the settings right, and let the farmers get on with it.
It’s one most of industry seems to appreciate, as long as it’s not an excuse for inaction – and so far, there’s been more sound bites than lasting change that will actually get the industry on its path toward $100 billion.
As Agriculture and Drought Minister, he’s in the box seat to make that goal happen, but this year he’ll need to use his influence to step up and really lead on key issues for the sector: workforce shortages, biosecurity, and more trade pathways to start.
MURRAY DARLING BASIN STATE AND TERRITORY WATER MINISTERS
Lisa Neville (Vic), Melinda Pavey (NSW), David Spiers (SA), Glenn Butcher (Queensland), Shane Rattenbury (ACT)
Victorian Water Minister Lisa Neville and her fellow Murray Darling Basin-state counterparts wield the real influence when it comes to plan implementation. Picture: Julian Smith/AAP
TRUTH be told, there are countless factors influencing how one of agriculture’s most vital resources – the 530,000 gigalitres of inflows in the Murray Darling Basin – is used.
From the irrigators of water-intensive crops and water brokers playing in the water market, to environmentalists seeking more water for wetlands and wildlife, the power plays and debates are ceaseless.
The Murray Darling Basin Authority cops a lot of the heat for its implementation of the Murray Darling Basin Plan, but it’s just the messenger – the reality is, the Murray Darling Basin state water ministers have the real influence.
On an individual level, their state water trading rules and resource plans dictate the shape of the basin; and when they come together as the ministerial council, it’s their decisions that determine the future of the basin plan.
Even Federal Water Minister Keith Pitt and the basin’s interim inspector-general Troy Grant are limited in how much they achieve without the states on side, given ultimate responsibility for water lies with the states.
Farmers are still waiting to see how the ministerial council will resolve key issues, such as the recovery of an extra 450GL from Victoria and NSW.
LIZ O’LEARY
Head of agriculture, Macquarie Group
Liz O’Leary, seen in a paddock of barley, usually farms from a Sydney office — but is regarded as an astute watcher of agriculture. Picture: David Roma
LIZ O’Leary is Australia’s biggest grain farmer. She is also one of the top four beef producers in the nation.
That she does so from a Sydney office does not diminish her standing. In fact, it enhances her role as the face of the increasing corporatisation of Australian broadacre farming.
As head of Macquarie Bank’s agricultural investment arm, O’Leary controls 50 cropping and livestock farms worth $2.7 billion across 4.7 million hectares.
The beef operation – valued at $1.3 billion – ranges from vast cattle stations in the north to highly specialised properties in the south.
More than 30 million kilograms of beef is produced each year, while a 320,000-head sheep flock yields more than 1.5 million kilograms of fine wool annually and 170,000 prime lambs.
In addition, Macquarie now owns 49 per cent of Australia’s biggest cotton farm – and water user – Cubbie Station, in southern Queensland.
These investments have made a name for O’Leary as an astute watcher of agriculture, quick to pick trends and act on them – even if it draws fire from some quarters as in the case of Cubbie.
Macquarie is now Australia’s biggest single ag investor, and the biggest operating in Australia by value, after Canadian behemoth PSP.
Yet despite the mind-boggling numbers, O’Leary, who grew up on a rice, wheat and sheep farm at Tocumwal, NSW has a simple farming philosophy: “If you look after the soil, it will look after you.”
FIONA SIMSON
President, National Farmers’ Federation
With Fiona Simson at the helm of the National Farmers’ Federation, agriculture is once again front-page news. Picture: Supplied
THE National Farmers’ Federation has copped a lot of criticism in the past decade or so: some argue it’s become something of a toothless tiger, others remember the days when the sight of farmers rallying at Parliament House would have politicians quaking in their boots.
That is slowly changing, however, with Fiona Simson at the helm, who’s high media profile and no-nonsense attitude is helping put agriculture back on the front page.
Simson and NFF chief executive Tony Mahar are arguably one of the strongest leadership teams the farm lobby has had in a long time, bringing with it immense opportunity to affect ag’s future.
Her approach is still not all farmers’ cup of tea – advocating working with decision makers behind closed doors over shouting and screaming – but it seems to be working: pretty much all the Federal Government’s major agricultural policies, from reaching $100 billion by 2030 to drought assistance, have come straight from the NFF’s playbook or are being managed by the NFF.
The balancing act for Simson and the NFF is making sure that close working relationship with government is always working in the farmers’ favour, and not the other way around.
JASON STRONG
Managing director, Meat & Livestock Australia
Meat and Livestock Australia managing director Jason Strong is a self-confessed “sucker for a well-cooked lamb loin chop”.
WHEN it comes to influencing what consumers put on their plates, Jason Strong has hit the ground running in 2021.
Meat and Livestock Australia, of which Strong is managing director, released its annual highly anticipated summer lamb campaign earlier this month, poking fun at Australia’s strict COVID-19 border closures.
The advertisement, again featuring former AFL great and lambassador Sam Kekovich, was lauded by industry and the greater public and seeming erased the memories of the 2019 campaign which came under fire for bowing to “the PC police” and pressure over the “Invasion Day” controversy by not being released until after Australia Day.
Strong, a self-confessed “sucker for a well-cooked lamb loin chop”, was appointed MLA boss in April 2019. He was formerly the organisation’s regional manager for Europe and Russia and in the past has served as chief executive of Smithfield Cattle Company and managing director of Australia’s biggest beef herd in AACo.
In an interview when he took on the top job at MLA, Strong said the industry “should not shy away from an ambition like doubling or tripling our supply chain margins”.
But with the new year opening with record returns to beef farmers, further squeezing margins along the supply chain, he certainly has plenty on his plate in the hope to achieve this.
STEVEN CAIN (COLES CEO) & BRAD BANDUCCI (WOOLWORTHS CEO)
Supermarket bosses
Coles chief executive Steven Cain. Picture: Andrew HenshawWoolworths chief executive Brad Banducci. Picture: John Feder
THE extraordinary power wielded by Coles and Woolworths bosses Steven Cain and Brad Banducci is almost unrivalled across Australian agriculture.
Given the supermarket chief executives reign supreme over almost 2000 stores stocking meat, fresh fruit and vegetables, grain products and the nation’s biggest liquor stores, 2021 is tipped to mirror every other year where their clout will continue.
All eyes will be on the movement of fresh fruit and vegetable prices, which have been tipped to rise as much as 60 per cent as a forecast worker shortage of about 26,000 plays out around March when multiple crops simultaneously require thousands of pickers and packers.
The question is whether the supermarkets will absorb some of the price hikes or force farmers to wear the costs.
A three-month ACCC investigation in the dying months of last year into the power imbalance between farmers, food processors and supermarkets found new fair trading laws were needed to protect suppliers.
This year will see the Federal Government progress a number of initiatives that support the competition watchdog’s findings and recommendations, including to strengthen unfair contract term protections under the Australian Consumer Law, enhancing the Food and Grocery Code of Conduct and improving price transparency for the dairy industry under the Dairy Code.
DAN TEHAN
Federal Trade Minister
Dan Tehan is the first rural MP to hold the federal trade portfolio since 2007 when Warren Truss served in the post. Picture: Mick Tsikas/AAP
NO ONE would envy the China mess Dan Tehan has inherited – but few would be better prepared to tackle it than him.
In a sense he has been working toward this role for his entire career, having started in the Department of Foreign Affairs in the 1990s, then as a diplomat, then adviser to former trade Minister Mark Vaile.
It’s also the first time the trade portfolio has been in the hands of a rural MP since Warren Truss in 2007: Tehan grew up near Mansfield, his grandfather was one of the founders of the National Farmers’ Federation, and his own electorate of Wannon in western Victoria relies heavily on agriculture exports.
In short, it’s an ideal CV for farmers in need of a trade Minister with trade nous and rural understanding, if he’s to help the industry’s $49 billion in ag exports grow.
Tehan walks into a firestorm of challenges for 2021: China’s ongoing trade blows will be top of the list, as well as negotiating deals with Europe and the UK, and finding new markets such as India.
DAVID WILLIAMS
Kidder Williams principal
David Williams, who is Kidder Williams principal, says international trade is the big issue to resolve this year. Picture: Luis Enrique Ascui
DAVID Williams is the backroom boy behind some of the biggest plays in corporate agriculture and aquaculture – and he loves doing a deal.
He is one of the “covert” influencers in agribusiness — in more ways than just facilitating deals.
At the Global Food Forum last year, he summed up the forum’s proceedings by saying he didn’t hear speakers talk about other important issues, such as waste and stomach health.
Williams later heard from one large agribusiness that its board raised all the issues he singled out.
Kidder Williams’ agribusiness clients include Bega Cheese, Select Harvests, Maggie Beer, the Costa Group and Premier Fruits Group.
In the past, Williams put together the merger of fertiliser companies Incitec and the Phosphate Co-operative Company to form listed agribusiness Incitec Pivot and resurrected the ailing salmon producer Tassal.
Williams believes there are many food and beverage businesses on the market and it is possible to build an Australian food conglomerate capable of matching it with the best in the world.
He says international trade is the big issue to resolve in 2021, particularly getting agricultural and food products into China.
Exporters may be able to get around the trade barriers imposed by the Chinese Government through building relationships with traders in other Asian countries, such as Vietnam and Indonesia.
But they also need to look at those other Asian nations as alternative markets for their produce.
Barry Irvin, CEO of Bega Cheese (left) and his long time adviser David Williams in Melbourne. Picture: Stuart McEvoy/The Australian.
On the evening of January 29, 2020, as Barry Irvin wined and dined the night away at Melbourne’s famed Flower Drum Chinese restaurant with his most trusted adviser, David Williams, the Bega Cheese executive chairman felt on top of the world.
Fresh from chairing his first Bega board meeting in nine months that day after seemingly winning a life-threatening battle with bowel cancer, Irvin was looking forward to returning to fulfilling his life’s ambition: building a great Australian food company.
But within weeks, the 49-year-old dairy farmer-turned-famed agribusinessman suddenly realised the enormous toll a punishing chemotherapy program had taken on his body.
“In all honesty, I was back and I was sick,” he tells The Weekend Australian. “I had lived this careful, very medically controlled life when I thought I was well. Within a month I was extraordinarily ill.
“I was struggling both mentally and physically. I didn’t realise the damage that the chemo had done until I tested myself. I have no feeling in my hands, limited feeling in my feet and everything takes an enormous amount of concentration. Early on, as soon as I came under pressure, it didn’t work. Before, when I came under pressure, I performed.
“By the end of the first month back I thought ‘I can’t do this’. What was keeping me going was the loyalty to the people around me. They would try to take pressure off me. I would occasionally candidly say ‘I am struggling here guys’. And they would see I was angry because I couldn’t perform the way I wanted to perform.”
Fast-forward nine months and Irvin and Williams had pulled off one of the corporate deals of the year, Bega’s $560m acquisition of the Lion dairy and drinks business, which turned Bega into a $3bn food colossus boasting brands such as Dairy Farmers, Pura and Farmers Union to add to the famous Vegemite brand it bought back from the Americans in 2017.
Dream deal
Now Irvin reveals the untold personal story of the deal he dreamt of all his life.
“When I was talking to the board about Lion in the initial stages, I told them we must be there. They asked me why. I told them this was the business I always feared. I never thought I had the weapons to beat them if they had their house in order. For the last decade it was a business I thought we did not have the weapons to compete against,’’ he says.
“We had multiple thought processes over the years about how we could get exposure to it. It was always what we wanted but we never had the capacity. The acquisition of Vegemite, with the extra manufacturing capacity and the scale, actually got us in the zone to have a go.”
But in March, as Lion’s parent company, Japanese drinks giant Kirin, was looking for a buyer for its embattled Australian dairy assets, Irvin was struggling just to stay on his feet when walking.
“I would fall over all the time because I had no sense of where I was — no feedback from my hands or feet. The only sense that was working was my eyes. When I closed them I fell over,’’ he says.
“I couldn’t write. I always thought when I wrote, so I had to retrain my brain. Every afternoon I would spend half an hour learning cursive writing. But it hurt. I don’t have feeling in my hands but somehow they hurt!”
Williams, founder of corporate advisory firm Kidder Williams and the man who helped Irvin through the first wave of his cancer ordeal, was nervous.
Only a month earlier, in an interview with The Australian, Irvin had proudly declared victory in his health battle to the world.
“I was worried that Barry would overstate the situation and the Bega board would panic,” Williams says. “I always felt the best for him. My natural inclination is to think he is going to come out of it. He is enormously fit. And I was always optimistic,’’ Williams adds.
Coping with Covid
The onset of the COVID-19 pandemic in March proved a godsend for Irvin. He fled his Lane Cove family home in Sydney suburbia to the safety of his Bemboka farm outside Bega.
“I am the only person who would say the best thing that happened to them was to be sent into isolation because of COVID,” Irvin says. “I was in the ironic situation of ultimately being able to protect myself by isolating at the farm.”
Irvin’s 31-year-old son Andrew, who runs the family’s dairy farm, moved all the cows that were going to have calves onto his father’s property.
Irvin bought himself a new motorbike and each morning rode around the paddocks to check on the herd.
“My life suddenly became isolation, Zoom meetings and cooking for myself. So I started living this hermit life,” he says.
Andrew would also routinely bring his father groceries, putting them on the front porch, but would only converse with him from the end of the long driveway.
“The instruction was wipe down all your groceries. So I used to get all the fruit and vegetables and shove them in the dishwasher on the cold cycle. I thought that was a piece of genius,’’ Irvin says.
“I also made myself a coffee in a takeaway cup each mid-morning to pretend I was at work.”
Once a month he would drive himself up to Sydney to visit St Vincent’s Hospital for blood tests, which should have reunited him with his 28-year-old autistic son Matthew.
During his father’s absence the staff at Giant Steps, a charity that runs schools for autistic children in Sydney and Melbourne that Irvin established and now chairs, had looked after the young man Irvin calls “Matty”.
“Giant Steps was wonderful. The normal care I would provide for Matty was taken on by Giant Steps,” Irvin says. “He would look at the window at home on a Friday and I wouldn’t turn up. But the activities I would normally do with him, one of his carers would do. So he was fine. But it was more difficult the other way.
“When I came up to Sydney for the blood tests, it was a strict routine. Straight from Bega to Sydney, into the hospital for tests, straight out. Into Lane Cove, into the room that my wife kept for me and then out again. We would not let Matty see me because that was too tough for him. So I would literally arrive, go straight into the room and leave early the next morning and drive back to Bega.”
As hard as it was, Irvin and wife Harriet had learned early in their son’s life what was best for him.
“When your child is upset and crying, you pick them up and give them a hug. Matty, when he was a little tacker and was crying, you knew that if you picked him up it made it worse,” Irvin says. “So that has always been very hard. But you train yourself in a discipline of what is best for him.’’
Father and son were reunited in August when Harriet brought Matthew to Bega. By then Irvin’s blood tests were good and the Lion deal was looming.
Looming Lion deal
All the negotiations were conducted on Zoom and only in the final week of the deal did Irvin venture to Kidder Williams’ Melbourne office to burn the midnight oil.
But even then, his body was not ready for the rigours of 2am finishes. On several occasions, he left the room to vomit in the toilet.
“[Lion’s adviser] Deutsche Bank had compressed down into one month what should have taken 12,” Williams says. “So it was tough on everyone. But he wasn’t match fit and he still recovering. After midnight he would say ‘I’m starting to struggle’.”
Irvin says the real “sobering moment” came when signing the contract.
“I now write like an 8-year-old. For all the glamour and preparation, the big challenge was ‘can you sign that contract?’ We all have our own pride and egos. As much as I knew these people knew about my situation, I said ‘I would rather not have people watch me struggle to sign the documents.’ So it was just one other Kidder Williams guy that witnessed me sign,” he says.
The deal signing marked the 12-month anniversary of Irvin’s last chemotherapy injection.
He says the Lion deal was a test of his recovery, and he believes he has passed that test.
Irvin now looks forward to Bega justifying its new-found label as “The great Australian food company”.
“The thing that has always bemused me about Australian agribusiness was we always did the agriculture bit well, but we left the food bit to foreigners,” he says.
“We don’t create companies that can invest in foreign markets. People might call us the Great Australian Food company but we haven’t achieved that till we have invested abroad.’’
Barry Irvin is back, this time he believes for real. He says Bega, its management team and its board have emerged from his past tumultuous 24 months stronger.
“I always had this belief that whatever happened, it wouldn’t stop me,” he says. “So the experience of the past nine months has made me way more humble.
“I had to suddenly recognise I am not what I was. And that is not a bad thing.”
China Grand Pharmaceutical and Healthcare Holdings Limited (“China Grand Pharma”) (HK:512) have taken a cornerstone equity position and entered into a strategic licensing agreement with Telix Pharmaceuticals Ltd (“Telix”) (ASX:TLX). The agreement is for China Grand Pharma to take Telix’s clinical stage products into Taiwan, Hong Kong, Macau and Mainland China.
Telix is a nuclear medicine company listed on the ASX with a market capitalisation of $720 million and has a pipeline of diagnostic and therapeutic products targeting prostate, renal (kidney) and glioblastoma (brain) cancer.
China Grand Pharma’s strategy is to become the foremost nuclear medicine company in the Greater China Region. To this end, it has been building up a portfolio of products and technologies and the Telix deal strengthens China Grand Pharma’s position in the nuclear medicine sector in the region.
Two years ago, China Grand Pharma teamed with the PE firm, CDH Investments, to acquire Sirtex for $1.9 billion, beating US company Varian Medical Systems’ bid of $1.6 billion.
David Williams, Managing Director of Kidder Williams, said “China Grand Pharma is opening new markets to some of Australia’s best technology and supporting Australian research with capital and clinical evidence”.
China Grand Pharma was advised by Kidder Williams.
Australia’s largest almond grower and processor is about to get that little bit larger.
It is understood ASX-listed Select Harvests is poised to acquire three almond farms and was readying a $120 million capital raising on Thursday evening to finance the acquisition.
Sources said the raising would be structured as a $40 million placement and $80 million accelerated non-renounceable entitlement offer.
It is understood the raising would be priced at $5.20 a share, which represented a 4.8 per cent discount to Select Harvests’ $5.46 last close.
Bell Potter was underwriter to the raising, while PAC Partners was a joint lead manager and Select Equities was pitching in as a co-manager. Select Harvests was being advised on the deal by Kidder Williams.
It is understood the acquisition of the almond farms – located on the NSW/Victorian border – would increase Select Harvests’ annual production by 4,600 tonnes in its first full year, and increase its total farm size to 9,300 hectares from 7,700 hectares.
The $538 million company was expected to make an announcement to the ASX about the acquisition on Thursday evening and the raising was pegged to launch on Friday morning.
Thanks for stopping by the Bega Valley to support farmers. Three truckloads of donated hay from Victoria arrived in the Bega Valley yesterday. It was kindly donated by Kidder Williams Limited. David Williams from Kidder Williams says despite the green pastures in the Bega Valley there are some farmers struggling to feed their livestock. He says they hope this donated hay should get the farmers through the winter season.
