Westland Milk sale: Northland-based Social Credit loses judicial review

Westland Milk was sold to dairy giant Jingang, part of the Yili Group, which is 25 per cent-owned by the Chinese Government. Photo / Supplied

A minor political party headquartered in Northland has failed in a bid to overturn the Government's decision to allow the sale of financially-embattled Westland Milk Products to Chinese dairy giant Jingang.

Social Credit, led by Whangārei-based party leader Chris Leitch, filed an application in the High Court in late September 2019 to challenge the lawfulness of the decision by a delegated decision-maker in the Overseas Investment Office (the OIO) to grant the approval.

Jingang is part of the Yili Group, which is 25 per cent-owned by the Chinese Government and is Asia's biggest dairy producer. It bought Westland, based in Rolleston and Hokitika, for $588 million.

Social Credit argued the decision-maker adopted the wrong test as to the character of two sites owned by Westland that are used for processing, manufacturing and warehousing of processed products.

The party said Westland's processing plants were on land that was arguably used for an agricultural purpose and was therefore farmland.

The OIO may have failed to apply a much stricter set of criteria under the Overseas Investment Act 2005 which would have seen ministers, not delegated officials, make the final decision, Social Credit said.

But Justice Robert Dobson ruled that the interpretation of farmland did not extend to sites used for processing raw milk and further manufacturing and processing activities.

Therefore, the Ministers of Finance, Fisheries, and Land Information NZ (Linz) were correct to delegate the responsibility of making a decision on Jingang's application to the chief executive of Linz.

Leitch said his party was considering appealing the High Court ruling but no decision had been made as yet.

Social Credit said it wanted to see New Zealanders reaping the benefits of the nation's world leadership in the primary sector, not overseas shareholders.

The party said massive chunks of the overseas exchange the country earned from its world leadership were lost when overseas owners claimed their profits.

There was a tidal wave of applications from overseas entities that wanted to snap up the best agricultural land and agricultural and horticultural businesses that New Zealand has, so the party was taking a stand on the issue, Social Credit said.