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Chinese owner’s ‘catastrophic failure’ drives Australia’s biggest dairy farm into the ground


The Chinese owners of Australia’s biggest and oldest dairy farming business are facing fresh scrutiny following claims of animal welfare abuse and overstocking of cattle that is causing effluent systems to fail and damaging nearby waterways.

Confidential documents, photographs and accounts from employees and locals obtained by The Sydney Morning Heraldand The Age reveal that conditions at Tasmania’s iconic Van Dairy farm have been deteriorating since its 2016 takeover by China’s Moon Lake investments.

The business, which was founded in 1825 and today comprises 23 farms and 30,000 cows was sold to Moon Lake for $280 million in a deal approved by then-treasurer and current Prime Minister Scott Morrison. Its biggest customers include New Zealand dairy giant Fonterra, which makes the Mainland cheese and Western Star butter brands.

Photographs obtained by this masthead, most of which were taken in December 2020, show farms in disrepair with effluent overflowing as drainage systems fail to cope with the number of cows on the properties. Other photos show skinny cows, dead cows and a 1000 litre cube container three-quarters full of dead calves.

The images are in sharp contrast to Van Dairy’s website which spruiks its Van fresh milk product as “milk from healthy cows grazing on lush green pasture in the most pure place on earth”.

The Foreign Investment Review Board (FIRB), which scrutinises international takeovers, attached undertakings to the 2016 deal including requirements that Moon Lake employ an additional 95 staff and invest $100 million into the business.

However, five years on insiders say the conditions have not been met and many skilled staff have been replaced by foreign workers who haven’t been sufficiently trained. An update in May shows staff numbers are virtually stagnant at 145 full-time employees and 34 casuals, while capital investment disclosed since 2016 totals $20.1 million.

Audit finds breaches

A confidential audit of Van Dairy completed by the Tasmanian Dairy Industry Authority (TDIA) completed on February 28, 2021, found 83 per cent of the dairy giant’s 23 farms had failed to comply with the Farm Dairy Premises Effluent Management Code of Practice. Failure to comply can lead to suspension or revocation of farm licences. One farm licence has been suspended and Van Dairy was forced to move 280 cows to a nearby property for milking.

TDIA officers visited 23 Van Dairy farms between February 22 and 26 this year and found 43 per cent of the farms that failed the audit had issues it regarded as “critical” or “major”, requiring urgent action.

One farm that failed the audit, Mistvale, was given days to fix the “severe failures,” while a number of other farms were given until March 31, a deadline they failed to meet. TDIA agreed to extend the deadline.

The report says, “TDIA does not have confidence in the management of Van Dairy Group Pty Ltd to ensure the effluent systems on farms are designed or operated effectively at this time.”

It highlighted severe management issues and significant overstocking of cattle on original effluent plan cow numbers. It noted that five of the farms increased herd sizes more than 60 per cent with no change to the effluent system to accommodate the increased wastage, which includes animal faeces, urine, milk, detergents and chemicals including a pollutant that can impact waterways and the environment if not managed properly.

It noted that the Greenfields farm had ignored a deadline for remediation.

The audit found a dead cow in an overflowing effluent pond, undetected by management due to vegetation growth. And at Harcus farm, designed for 1600 cows, numbers had increased 63 per cent to 2600 cows, resulting in a “catastrophic failure of the effluent system” with effluent pouring into paddock drains and a creek.

Dr Rachel Brown, an adviser on sustainable dairying based in Tasmania, said the situation on the Van Dairy farms makes her and many in the dairy industry sad and frustrated. “This should not be happening on dairy farms in Australia,” she said. “If there is no motivation for care factor and basic maintenance is not done, things go wrong at a very large scale.“

The TDIA report pointed to a lack of oversight of the farms, failure to clean out effluent systems, which caused problems such as blockages, a failure to replace or repair broken equipment, a lack of investment in infrastructure such as irrigation equipment and a failure to adequately address previous corrective action requests.

“The current operations manager at Van Dairy does not have appropriate skills and knowledge in dairy farming to assist farm managers,” the report said.

Greens senator Peter Whish-Wilson, who is based in Tasmania and has been raising concerns for years about the condition of the farms and compliance with its pledges to FIRB, said the business has been run into the ground, there have been animal cruelty allegations and the effluent discharges were causing significant environmental harm to the Boullanger Bay and Robbins Passage in Tasmania.

‘Going on for years’

Since Van Dairy was sold to Moon Lake Investments it has been riven with controversy. In 2018 five independent directors quit, citing a failure by the owner to invest in irrigation systems and maintenance to make the business sustainable.

In June 2019 a group of senior staff wrote to the owner, warning of animal welfare issues due to poor operational repairs and maintenance standards.

A whistleblower, who worked on a number of Van Dairy farms over the past year and agreed to speak to the Herald and The Age on the condition of anonymity, said despite the various scandals, the company and regulators had been asleep for years, allowing the situation to get to the current state.

“This schmozzle hasn’t happened overnight, it has been going on for years,” he said. “I’ve never seen anything like it in all my years working on farms, it’s a total balls up.” He said underinvestment and untrained staff running the farms was a recipe for disaster.

He said on at least one farm the cows had not been fed for days, some farms didn’t have enough water for the milking cows to drink, which caused them to struggle, some had been left to die in effluent and on one farm the cows displayed symptoms of mastitis. In the past few days a number of calves had been shot due to malnutrition.

Another said the reputation of the farms was so poor that the company was now having trouble hiring locals with experience. “It is gross mismanagement,” he said. The former employee said it was a tight-knit community and what had gone on was a national disgrace. “It should never have been sold to Moon Lake, they have owned it for five years and they still don’t know the basics.”

Locals, who also asked not to be named, said state politicians and authorities had been sweeping the problem under the carpet for years. “It’s got so bad they can’t anymore,” a local said.

Van Dairy ‘does not treat animals badly’

In response to the animal welfare allegations, a spokesman for Van Dairy said: “Van Dairy is aware of statements from outside sources about water troughs not being maintained and consequently being empty, resulting in livestock dying of thirst, allegedly substantiated by a photograph of a dead cow near a water trough. This was not the case. Yes, the cow was dead, but not from a lack of water. In the interests of the animal’s welfare it had been euthanised for an unrelated reason.”

The spokesman said a responsible dairy business “does not treat animals badly”.

“Van Dairy adopts accepted and standard animal husbandry practices for the health and welfare of its livestock. Workers and managers are directed to act quickly when an animal requires treatment and we have a long-standing business relationship with local vets who respond promptly if the need arises. Van Dairy cares about its animals and rejects any claim to the contrary.”

TDIA was sent a series of detailed questions, including what it takes for a licence to be suspended or revoked and why it hadn’t acted sooner. The matter was referred to the media division at the Department of Primary Industries, Parks, Water and Environment. The department said the TDIA continued to work with the company, the Environment Protection Authority and other authorities to ensure compliance. “As the investigation is still continuing, there is nothing more to add at this time.”

FIRB also declined to answer questions. In a statement it said the government expects all foreign investors to maintain the highest standards of corporate behaviour.

Van Dairy declined to answer questions but said it had increased staff since 2016, invested in capital and was committed to running a world class dairy business. “The company is investing in current and new people, caring for animals, including local wildlife, and protecting the environment,” it said.

It said TDIA had issued corrective actions and timelines for remedial work related to effluent ponds and pumps.

It said the local council at Circular Head had issued environmental protection notices in relation to effluent systems, specifically related to effluent ponds and pumping systems. It said remedial action was being monitored by the council. “Most of the urgent repair work will be completed within the next two weeks,” it said. “More intensive works that will provide a permanent solution will be completed by the end of April 2021.”

Fonterra, which is one of the biggest purchasers of Van Dairy milk, said since becoming aware of the issues it had been working with the company, its management, industry and regulators to “ensure a comprehensive plan was put in place to improve the issues”.

It said the “issues” were caused by shortcomings in infrastructure and maintenance and that Fonterra was helping put in place a plan. “These include significant infrastructure improvements, which are already underway, to correct the effluent management issues, train staff to help build management capability, and improve herd rotation management to ensure animal health and welfare standards are maintained at industry standards.”

It said it regularly conducts site visits and at times had referred questions regarding regulatory compliance to the TDIA for further advice or investigation.

Senator Whish-Wilson has written a series of letters to federal Treasurer Josh Frydenberg, including on March 31 urging the Treasurer to meet with Moon Lake to seek agreement to alter FIRB’s voluntary undertakings and make them mandatory.

“I note under the Foreign Acquisitions and Investment Act the Treasurer may retrospectively alter conditions of approval, subject to owner agreement, or you considering it is in the best interests of the investor,” Senator Whish-Wilson said. “A failure to do so will undermine the public’s confidence in foreign investment in Australia and the FIRB process,” he said.

FIRB told a parliamentary committee inquiry last year it had taken zero enforcement actions against companies in the past three years to ensure compliance.

Source: smh.com.au


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