Access to capital and foreign markets, class actions and
possible market concentration are all major issues in agribusiness
at the moment.
We highlight below some of the more notable recent developments
which caught our eye in the agribusiness sector over the past few
Further scrutiny of ADM bid for GrainCorp
The Senate's Rural and Regional Affairs and Transport
References Committee has recommended the ACCC reopen its informal
review of Archer Daniels Midland's proposed acquisition of
GrainCorp in its report on
Ownership arrangements of grain handling.
The Committee's chair, NSW Senator Bill Heffernan, said the
ACCC needs to take a closer look at the transaction, and in
particular, the effect it would have on competition in
Archer Daniels Midland has acquired almost 26% of
GrainCorp's shares (as of 20 August) after launching its $13.20
takeover offer in May. A condition precedent to the deal is a 50.1%
shareholder acceptance, however the company has previously
indicated that it wants full control. Following delays in obtaining
FIRB approval, ADM has now extended its deadline to 7pm on 16
Trade experts are warning that the Abbott Government's trade
negotiations with China could be affected by Barnaby Joyce's
campaign against increased Chinese investment in Australia. Leading
company directors from Transurban, CSL, Perpetual, NAB and Nestle
have warned that the high cost of doing business in Australia and a
recent uptick in xenophobic rhetoric are jeopardizing our access to
Source: Australian Financial Review, August 24,
Abalone industry impacted by virus: $82 million class
Maurice Blackburn is acting on behalf of 10 abalone licence
holders who are seeking $82 million in damages after a lethal virus
wiped out one third of Australia's abalone industry. The
applicants claim that the Victorian Government failed to control
the outbreak after being told about infected abalone farms. The
crisis has devastated abalone stocks in Victoria, and has been
dubbed "the foot-and-mouth" of the abalone industry.
Source: The Canberra Times, August 19, 2013
"Milking" the Fonterra scandal
Australian Dairy Farmers president Noel Campbell has urged the
Federal Government to take advantage of New Zealand's dairy
woes by making a free trade agreement with China. He said
"there is significant work being done in that space at the
moment, so we are hopeful of what might come out of it. But this
Fonterra thing has given us increased impetus, there's no doubt
about that." In 2011-12 Australia exported $389 million worth
of dairy products to China, compared to New Zealand's NZ$2.1
billion ($1.85 billion).
Source: The Canberra Times, August 19, 2013
Challenges for agribusiness lending
Following recent comments from former ASIC chairman Tony
D'Aloisio about the poor state of Australian agribusiness
lending, Murray Goulburn Co-operative general manager Robert Poole
has said that foreign capital would replace its domestic
counterpart if Australian banks don't step up to the plate. He
said that "a lot of the banks are still funding agriculture
like they did in the 1950s and 60s, with 50 per cent equity and
mums and dads borrowing money ... that is, I think, going to
rapidly change and I think the banks are going to be involved in
that or they are not. Because the external capital is inevitably
going to come".
Source: The Australian, August 21, 2013
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
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