Chicken distributor Tegel's controversial plan to build a giant farm in Northland has been spoiled by the Overseas Investment Office (OIO).

Tegel applied for resource consents to set up a broiler chicken farm at Arapohue, near Dargaville, with a capacity to stock up to 1.3 million chickens.

However, Land Information Minister Eugenie Sage and Associate Finance Minister David Clark declined the consent under the Overseas Investment Act.

"Minister Clark and I considered that the land sale was not likely to result in substantial and identifiable benefits to New Zealand, so we declined the application," Sage said.

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"Tegel's application was declined because of the considerable uncertainty about whether the company would obtain the resource consents it required for its proposed Arapohue broiler chicken farm investment.

"Both Kaipara District and Northland Regional Council staff recommended the consents be declined and the hearing process has been suspended."

A public protest against a planned chicken farm in Dargaville in March. Photo / Michael Cummingham
A public protest against a planned chicken farm in Dargaville in March. Photo / Michael Cummingham

Tegel sought to purchase 252ha of Northland property to build the facility and upset locals in the process.

In August, Kaipara residents who had lived in the area for decades threatened to vacate the area if the farm was built.

Karen Exley told the Herald she wouldn't be able to stay knowing the living conditions the chickens would experience.

"We wouldn't be able to stay because it goes against everything we believe in," Exley, a Dargaville local for the past 30 years, said.

"I wouldn't be able to now drive past a mega broiler factory every day knowing those chickens were in the sheds."

Animal advocacy group Direct Animal Action, who campaigned alongside concerned locals, welcomed the news to stop the proposed farm.

"We're absolutely ecstatic about this victory!" said spokesperson for Direct Animal Action, Deirdre Sims.

"This decision is a win for the people and for the animals."

"Now Kaipara and the Kāpehu Marae won't have to live beside a huge, stinking eyesore and Tegel won't be able to farm an extra nine million chickens per year in cruel conditions."

Sage said a large number of submissions were filed from community members against the Tegel farm.

"The large number of submissions from community members and Kāpehu Marae helped illustrate the difficulties that Tegel would have had in gaining the resource consents it needed to proceed.

"Accordingly, it was uncertain whether the claimed benefits of additional jobs and export receipts from the land sale were likely to occur," she said.