The collapse of the controversial sale of a Fiordland farm to a Chinese investor is the kind of result expected due to tighter restrictions on foreign buyers, Land Information Minister Eugenie Sage says.

The Opposition says the rule changes will lead to perverse outcomes for the economy.

Landcorp Farming, the state-owned farmer trading as Pamu Farms of New Zealand, went with Southland farmer Ed Pinckney after the preferred buyer, a Chinese company, withdrew its offer for Jericho Station.

The sale was controversial as Jericho, a 1359ha sheep and beef station, would have been the first Landcorp farm sold to a foreign buyer.


Pinckney, who bid $8.5 million, was pipped by an $8.7 million offer from Chinese buyer Qianlong Farms when the farm was put to market in late 2016.

Landcorp confirmed today that Qianlong had withdrawn from the Overseas Investment Office (OIO) and Pinckney's offer, which does not require OIO approval, had been finalised.

The Government strengthened the restrictions on foreigners buying New Zealand farmland last December.

The Ministerial Directive Letter to the Overseas Investment Office saw the Overseas Investment Act criteria applied to much smaller tracts of rural land and tightened how the OIO assessed genuine benefits from sales to overseas investors, placing less importance on donations and more on bringing in new technology and generating more jobs and exports.

Sage said today it was "the sort of result that we would have anticipated".

"It's a privilege, not a right, to own sensitive land in New Zealand so overseas investors have to show they are providing substantial and identifiable benefit to New Zealand. That can be increased jobs, increased processing, increased export receipts."

Sage said 19 applications were withdrawn last year so it was not unusual.

National leader Simon Bridges said there were some perverse outcomes from the OIO restrictions, with fewer overseas investments into New Zealand.


"Some New Zealanders will think that's a good thing but … it means less exciting things happen. It means less aquaculture, less kiwifruit orchards, less development of our farms and so on which is what drives and grows an economy.

"The changes the Government are trying to make are bad and they are going to lead to perverse outcomes such as less investment in New Zealand and less prosperity."

NZ First leader and Deputy Prime Minister Winston Peters was critical of the deal last year, saying the opportunity cost would have made up the difference in the bids.

"We said it was not in the interests of the country. We made it very clear that a New Zealand alternative was a far better deal financially and we've been proven to be right on this matter," he said today.

Pinckney told the Herald today he was pro-foreign investment but was "chuffed" his bid won the day.

"I'm pretty chuffed, it's been a big year."

"I'm not anti-foreign investment; I want to make that clear, but I think it should be a level playing field which is important. What do I mean by that? In the small differences in price values offered, there's got to be a platform good that is fair for both sides."

Pinckney didn't know why Qianlong had withdrawn but speculated that the hurdles the company faced may have been too high.