China has ‘too much power’ over Australian economy: Bellamy’s shareholder Jan Cameron
WITH a population of 1.4 billion and a growing middle class, China is Australia’s biggest export market.
Its demand for “clean and green” products like baby formula, vitamins and food products has created vast fortunes for companies like Bubs Australia and Chemist Warehouse, making the nation our most important trading partner.
But its government can unleash chaos in an instant, wiping millions from the value of Australian companies by changing its import rules with little or no explanation.
Now one of our most accomplished entrepreneurs has hit out at China over its seemingly “random” move to cancel the license of an Australian milk powder cannery.
Jan Cameron, the woman who made Kathmandu an international brand before selling her half-share in the business for $247 million, believes China has “too much power” over the Australian economy.
“It is concerning the Chinese can really be in a such a powerful position over our economy that they can turn things on and off seemingly at random,’’ Ms Cameron, who has an 18 per cent stake in Bellamy’s, told the Australian.
“I’d love to get inside a Chinese baby formula factory and see what standards of practice they have there ... It’s not tough when you are buying things from them; it is just tough when you try to sell to them, despite our wonderfully free trade agreement produced by Andrew Robb, who is now a Chinese employee.’’
The former trade minister took a $880,000 part-time job as a consultant to a Chinese billionaire reportedly aligned to the Chinese Communist Party, a move that has been closely scrutinised.
ANOTHER BLOW FOR BELLAMY’S
Ms Cameron’s comments came after Chinese regulators last week suspended the infant formula import certificate of the Camperdown Powder cannery, right after baby formula giant Bellamy’s inked a deal to buy a $28.5 million, 90 per cent controlling stake in the facility — as part of its plan to expand production.
Troubled Bellamy’s, once a $1 billion success story, had its shares placed in a trading halt for the second time this year after learning of the Camperdown suspension on Friday.
Shares in the company have dropped from a high of $14.53 in December 2015 to $6.74 before the most recent trading halt.
Investors wiped more than $770 million from Bellamy’s value in a share market bloodbath sparked by a market update last December that revealed Bellamy’s profit guidelines had been too optimistic, in part due to a change in Chinese regulations.
Shifting preferences among the fickle personal shoppers known as daigou, a major Chinese supply channel, were also blamed for the crisis that saw Bellamy’s chief executive Laura McBain resign in January.
The company is facing several potential shareholder class actions, and Ms Cameron led a failed attempt to topple its board at a fiery shareholder meeting in February.
Even Blackmores was not immune from the China risk, with $20 million wiped from its first-half profits unveiled in February also attributed to declining daigou sales.
BELLAMY’S STATEMENT
Milk powder companies operating in China, such as Bellamy’s, must be certified by the Certification and Accreditation Administration of the People’s Republic of China.
“The trading halt is requested to allow the company to determine the reasons and impact of the Camperdown’s suspension of its CNCA licence by the China authorities overnight,” Bellamy’s said in a statement to the ASX on Friday.
“Importantly, the suspension does not impact the sale of the company’s organic baby and toddler formula products, which are currently manufactured by Fonterra and Tatura Milk (Bega) under their respective CNCA licences.”
The company is due to further update the market on Tuesday, until which time its shares will remain in a trading halt.
— With AAP.
Originally published as China can cause chaos in Australia
