Mongolian hoarder gets its prey – What Fonterra’s advisers knew months ago

Fonterra’s legal brief told the Commerce Commission five months ago that the Inner Mongolian company was in talks to buy Oceania Dairy.

Chapman Tripp’s Grant David spot-lighted the Yili talks when he tried to convince the commission that Fonterra should be allowed to buy NZ Dairies. Fonterra had become aware of further competition in the industry, he noted.  “Over the past few weeks, the owners of Oceania Dairy have entered into negotiations with Inner Mongolia Yili Group, one of China’s largest dairy processors.”

Oceania played dumb (of course). It would not have been in its interest for ‘news’ to break that it was in negotiations with Yili, while the protracted Crafar farms sale to Shanghai interests was still the subject of immense political heat.

So, all reporters got was the standard ‘neither confirm nor deny’ fob-off which, take it from us means ‘Yes’ – 90 per cent of the time.

The dairy industry – particularly in China – is riven with skilled players who seek out intelligence on their competitors and their plans to try and stay one step ahead of a very competitive game.

Fonterra’s advisers were (once again) spot on.