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Monday, 29 June 1998
Page: 5618

Mr DONDAS (10:45 PM) —Thank you very much, Mr Speaker. I rise this evening to speak about the current takeover bid for Pauls Ltd, the largest milk supplier in the Northern Territory. The major purpose of my speech is to alert the Treasurer (Mr Costello) to the potential loss of employment in my electorate. Pauls also operates the Coca-Cola franchise and manufactures and distributes a large range of soft drinks as well as other dairy produce. It also exports to Brunei from Darwin. Pauls employs some 130 people in my electorate. Pauls first started in Darwin in about 1956. The first milk that we bought from Pauls was reconstituted milk—shipped in tins shaped like kerosene tins—from Queensland. Pauls also operates quite extensively in South-East Asia and China. The total number of employees in the company is about 1,500.

National Foods made a takeover bid for Pauls on 28 April which was withdrawn this afternoon. A counter bid was made by Parmalat, an Italian based international dairy industry conglomerate owned by the Tanzi family.

I want to raise some concerns about the Parmalat takeover in the interests of my electorate. In the early 1990s Parmalat was a medium sized outfit focused on the Italian domestic market. In the five years between 1992 and 1997 Parmalat acquired control of more than 80 companies in over 15 countries. I am not necessarily insinuating any wrongdoing, but I rise in this adjournment debate to raise certain matters regarding employment, plant rationalisation and competition.

Parmalat has not hesitated to spend heavily to secure its objectives. In a raid on a South African dairy company, Bonnita Holdings Ltd, Parmalat paid almost double the market price. With Bonnita shares trading at 1.55 rand, Parmalat offered 2.82 rand cash for each share.

Expanding to become a major overseas player while retaining control of the operation in the Tanzi family seems to have taken a lot of juggling. Some of the stock and currency manipulations by Parmalat and its holding company, Coloniale, have attracted media attention in Italy itself. On 11 March this year, the reputable Milan daily Corriere Della Sera posed some questions about the corporate manipulations the Tanzi family was pushing though while, at the same time, apparently borrowing large sums through Swiss banks. To quote the Corriere Della Sera:

The source of Parmalat's funding has been shrouded in secrecy.

The Corriere Della Sera went on to say:

At Parmalat's headquarters the identity of the banks was kept under heavy wraps.

Parmalat pays high prices while retaining family control and avoiding the scrutiny of a public listing, which seems to add up to plant rationalisations and laying off of employees. l say that because this time last year Parmalat was expanding its interests in Canada and merging a couple of Canadian companies in the process. In the Toronto Globe and the Toronto Mail on 29 July 1997, a spokesman was reported as saying there would be:

Lay offs and possible plant closings in Ontario and Quebec as a result of the merger.

The spokesman also said:

There will be undoubtedly some downsizing as we merge the two companies probably in some plant locations as well as some corporation functions.

A takeover by Parmalat will not necessarily lead to greater employment for Australians, as in actual fact it has led to less employment for Canadians. A worldwide dairy empire does not necessarily mean greater employment opportunities; it may mean greater rationalisation.

It seems that Parmalat's competitive track record in Italy deserves some scrutiny. It appears that Parmalat is not above anti-competitive conduct, according to a report from Reuters news service. Reuters reported on 11 August 1995 that Italy's anti-trust authority was investigating market rigging between Parmalat and other companies and that the market rigging allegations extended outside Italy and across a range of dairy products. Reuters also reported that in 1996 the Milan public prosecutor launched an investigation into allegations of complicity in fraudulent bankruptcy against the head of Parmalat.

At the moment all this may be just a lot of smoke, but I want protection for my constituents. We do not have anything like enough competition in the Territory. Through its isolation it lends itself to higher prices, and we want to avoid that at all costs. We do not want any job losses. We do not want the Paul's Darwin plant to be closed and the milk trucked in from the south. For all these reasons I will be writing to the Treasurer to ask him to carefully check the bona fides of all parties involved in this takeover and to act to protect the best interests of my constituents and all Australians.