Drivers along Australia's highways get used to looking out for the unique tourist attractions known as Big Things: a 16-meter-high pineapple with a top-floor observation deck, a six-meter boxing crocodile, a four-story concrete sheep with death ray eyes.
They don't come much bigger than S. Kidman & Co., a cattle company whose outback ranches cover more land than South Korea. It's going to be staying on the list of domestically owned Big Things for a while, after the country's Treasurer today blocked its sale to an overseas buyer. But don't be surprised to see it go eventually.
The problem for Kidman is the Woomera Prohibited Area, a high-security expanse of semi-desert where Britain tested atomic bombs in the 1950s. It's still in regular use today as the world's largest missile testing zone. About half of Kidman's sprawling Anna Creek property lies within the Prohibited Area, a problem given one of the most probable buyers cited by local media has been a Chinese company, Shanghai Pengxin Group.
A sale of Kidman ``in its current form'' would be contrary to Australia's national interest, Treasurer Scott Morrison said, citing the overlap with Woomera. ``It is not unusual for governments to restrict access to sensitive areas on national security grounds.''
China hasn't always been a big consumer of red meat. Back in the 18th century, when painter William Hogarth was making beef an emblem of English nationalism, Qing dynasty gastronome Yuan Mei considered it unusual enough to be grouped with exotica like palm civet and water deer in his compendium of recipes, the Suiyuan Shidan.
As recently as 1984, Chinese people consumed just 343 grams of beef per person, per year -- about the same as a 12-ounce steak. Demand has since risen 15-fold to 5.1 kilograms a year -- still modest compared with the U.S.'s 37 kilograms per person, but strong enough to drive prices significantly higher:
At a time when Chinese concerns over food security are driving a $42 billion bid for Swiss seeds and chemicals giant Syngenta and foreign investment in Australia's farm sector is rising, Kidman is a natural target.
This isn't the first time disquiet over potential eavesdropping on the Prohibited Area has stymied a Chinese attempt to buy a local company. Back in 2009, one of Morrison's predecessors blocked China Minmetals Group in an attempted takeover of debt-stricken OZ Minerals because its Prominent Hill mine sat in the middle of the zone. The deal ultimately went ahead with some of OZ's assets including Prominent Hill carved out into a separate Australian-listed company.
Why should Kidman be any different? Prominent Hill made up 45 percent of OZ Minerals' assets at the end of 2008, so separating it was a significant concession. Anna Creek, while accounting for 23 percent of Kidman's acreage, is home to only 7.5 percent of its herd:
Kidman has been closely held by the descendants of its founder since the 19th century, so the fact it's on the market at all is a sign the owners are keen to sell. With the whole company reported to be valued at about A$350 million ($251 million), this beef is going to get carved one way or another.
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