Between the lines: Sealord ruling: do not pass go

By LIBBY MIDDLEBROOK

The Government decision to rule out overseas ownership of Brierley's 50 per cent stake in Sealord is like drawing a do-not-pass-go card in Monopoly.

The trouble is, when overseas bidders started playing the game they were unaware the rules could be changed at the last minute.

Foreign entities had shelled out at least $250,000 each to go through a lengthy due diligence process.

Then, two hours before the deadline for final bids for Brierley's holding last Friday, Finance Minister Michael Cullen and Fisheries Minister Pete Hodgson caved in to political pressure, slamming the door on foreign bids for half of Sealord.

The ministers had signalled it could be a testy game when they took back the right to approve or decline the bidders earlier in the month, a decision previously left to the Overseas Investment Commission.

After a surge of opposition from Maori groups, local fishing operators and Sealord competitors, the ministers decided to put a 24.9 per cent cap on foreign bids, claiming it was not in the country's best interest to allow a higher stake. Most New Zealanders are probably happy about the Government's move to keep most of Sealord in New Zealand ownership.

Why? Because fisheries are arguably our most sensitive natural resources and Sealord, with almost 25 per cent of the national quota, is the country's largest fishing company.

Overseas bidders could also have presented a threat to the sustainability of the resource, operating under less stringent fisheries management systems than New Zealand's.

Knowing these sentiments, Brierley Investments ought to have sounded out the Government before inviting overseas bids. It had been through this process before with Air New Zealand, when the Government refused to allow Singapore Airlines to own more than 25 per cent of the national flag carrier.

Sealord's potential buyers may have been wise to have taken advice before committing themselves to the outlay required to make a bid - unless they had been assured the Government was unlikely to intervene.

It could be argued Dr Cullen and Mr Hodgson should have been well aware of the public's opposition to foreigners from the outset, rather than dithering around with the rules at the 11th hour.

Equally, they could be said to have short-circuited the disappointment that may have been delivered by the Overseas Investment Commission.

If Brierley had first obtained clearance, it would have been much harder for the Government to have swallowed the political bait trawled by pressure groups within or outside its ranks.