By Keith Stewart

Approval for the sale of Crafar Farms to a foreign company is the latest chapter in the persistent myth that overseas investment in New Zealand is of benefit to New Zealanders. While the Prime Minister burbles on about the value of such an investment as the purchase of Crafar Farms, a summary of the purchase by the Overseas Investment Office makes a joke of his claims.

For a NZ$210 million 'investment', New Zealand gets at best 1 job and no control over the activities of the new owners. But the creditors of Crafar farms, mostly foreign bankers and probably mates of the PM, get their bad investment back. Soi this is not a deal of any value to New Zealanders.

 
As for our country, yet more of our valuable land has gone beyond our control. And its not as if we are a big country with heaps of available land. To put the Crafar sale in context, if Fonterra tried to by an equivalent portion of Chinese arable land, or roughly 585,000 hectares, can you imagine the Chinese government allowing that! Fat Chance.

So much for the current myth of foreign investment, but if you actually think that selling off our productive land assets is on balance a good deal, consider the news this week about Pernod Ricard. The French based booze corporation took over what was once Montana in 2005, to a round of applause from our various regulatory authorities and our government, and this week announced a considerable loss on its New Zealand operations.

Since becoming New Zealand's largest wine producer, Pernod-Ricard have dumped the Montana name, sold off great New Zealand brands such as Corbans and Lindauer, quite their entire operation in Gisborne and moved head office to Australia. As well as the millions they lost quitting these assets, IRD claims they also owe the country millions in tax.
So if you want a true experience of the value of overseas investment in our land based industry, you could no better than to talk to a Gisborne grape grower who has been shafted by Pernod Ricard. Oh, and note that since Pernod Ricard took over, exports of New Zealand made sparkling wine have plummeted, down from 2.5 miilion litres to a mere 1.2 million, or by more than 50%.

As Montana were singularly responsible for more than 90% of sparkling wine exports, you can measure the impact of Pernod Ricard's investment in New Zealand as a reduction of at least NZ$12 million in export receipts for sparkling wine. While some of that does head to Paris by way of profits, most of it has been taken directly from the Gisborne economy.

So when John Key claims that the sale of the Crafar Farms is for the benefit of the economy, don't believe him. He is either lying or he is simply too stupid to do the sums.