Farming body backs decision on Lochinver

Stevenson Group, which agreed to sell the property to the Chinese buyer, said it was unclear why the farm was different to others that had been approved.

Ministers have blocked the sale of the iconic Lochinver sheep, beef and dairy support station on the Napier-Taupo highway to Chinese firm Shanghai Pengxin on the grounds it did not meet the tougher tests under the 2010 Overseas Investment Act for creating value for the country.

Key said the OIO had made it clear its recommendation was a “line call”, and he was certain the ministers’ decision that it was not of enough benefit to New Zealand was sound. She has no qualms in saying she made the decision in the best interests of New Zealand, rather than bowing to public opinion.

Federated Farmers said it welcomed the Government’s decision to decline the sale of Lochinver Station, near Taupo, to China’s Shanghai Pengxin Group.

Stevenson Group, the company selling the farm, said it was also disappointed by the outcome after a 14-month process.

The deal had received approval from the Overseas Investment Office and was expected to sail through because, in reality, not much Chinese investment had been rejected recently.

The OIO had recommended to Associate Finance Minister Paula Bennett and Land Information Minister Louise Upston the $88 million sale met the requirements for sales of sensitive land to foreigners and included improvements such as conversion of forestry land to dairying that would have increased the output of the 13,843ha station. “I did take heavily the responsibility of it being substantially and identifiably of benefit to New Zealand”.

The decision on Lochinver will have some interest for farmer suppliers of Silver Fern Farms which announced earlier this week it had reached agreement with Shanghai Maling, 38% controlled by the Chinese Government, to form a joint venture company. A lot of sensitive land has gone into the hands of foreign buyers in that time.

“They’ve signed off 50 foreign sales in the last six months and the heat has got to them”, he said.

The Stevenson family has owned Lochinver for 60 years but started as a drain-laying business in 1912, expanding into quarrying and construction in the late 1930s, and making concrete blocks from 1946.

In Parliament this week a Government minister threw what was supposed to be a highly barbed attack at New Zealand First, exclaiming that if that party had its way, all land in this country would be owned by New Zealanders. “It’s unfortunate that other sales without similar attention are being waived through”, Grant Robertson says. “What we need is for foreign investors and those involved in the sale of rural land to work harder to find ways to demonstrate economic benefit, both on the property they are targeting and for the broader industry”, he said.

It’s the first time ministers have rejected a bid to buy a significant landholding in New Zealand since the rules were tightened in 2012 during the Crafar Farms decision to require the OIO to assess whether a foreign buyer could offer more than a New Zealand buyer.