Lion Dairy & Drinks deal to sell to China Mengniu a "relief" says DFMC

More than 250 farms in Queensland, New South Wales, Victoria and South Australia belonging to DFMCs 350 members supply over 270 million litres of milk.

Until recently, every drop of that milk went to Lion Dairy & Drinks, interlinking the fortunes of the processor and DFMC members and the decision by Lion owner Japanese brewer Kirin to put the business on the market a year ago, had stymied plans.

DFMC executive officer said the overwhelming response from members had been one of relief.

"The Lion Dairy & Drinks business has been for sale for more than a year now," Mr Kebbell said.

"It is somewhat of a relief to know there is a next step."

Mr Kebbell said DFMC did not share concerns expressed on social and tabloid media about Chinese ownership.

"Our partners, Lion, have had international owners, for more than a decade," he said.

"Some of the FIRB-type stuff that has been really hotly contested involves buying agricultural assets.

"Well, there are none of those.

"Lion did own some dairy farms on Kings Island, but they've gone to Saputo.

"So it's not a small amount or a negligible amount, it's no agricultural assets.

"It's processing sites and brands.

"And to have a dairy owner has got to be a good thing - to that end, we're relatively excited.

"Mengniu have huge scale so their ability to invest in the business is also great."

The number one question DFMC farmers had asked following the announcement was rather pragmatic.

"'How do you pronounce it?' is is always at the top of the list," Mr Kebbell laughed.

"And not many know much about Burra either, particularly our farmers in the northern regions."

Mengniu, which is listed on the Hong Kong Stock Exchange, already owns a 79 per cent stake in Burra Foods and was given the green light to buy Bellamy's on November 14, on the condition most of Bellamy's board directors were Australian citizens and residents.

Lion's business includes the Dairy Farmers, Masters and Pura white milk brands and flavoured milk under the Dare, Farmers Union and Big M names, plus Yoplait yoghurt in Australia and South East Asia, and the Berri and Daily Juice lines.

Its processing operations span 11 sites, plus a half share, with Bega Cheese, in the Canberra Milk business, Capitol Chilled Foods.

Lion is also a joint venture partner in plant-based beverage maker, Vitasoy Australia Products, at Wodonga.

It handles about 825 million litres of milk annually.

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