DAIRY ME, THAT’S AN ODD MOOVE
HARVEY Norman’s acquisition of a stake in a dairy farm may be mystifying for some, but not for executive chairman Gerry Harvey.
The electronic and homewares retailer has agreed to pay $34 million for a 49.9 per cent stake in dairy company Coomboona which owns land and farm assets in northern Victoria’s Goulburn Valley. The business includes dairy farm operations, along with a pedigree breeding and genetics division.
Mr Harvey said the investment reflected the tough times in the retailing sector. “You have got to look around to try to find out where you can put your money and try and make some money. It’s not that bloody easy,” he said.
Mr Harvey said that if Harvey Norman was not making money out of retailing, it would put its money into something else, and other non-retailing investments were under consideration.
Morningstar analyst Farina Parsons said that the acquisition was small, but “very odd”.
“It (the dairy farm) has got nothing to do with what they (Harvey Norman) do,” Ms Parsons said. “Maybe Gerry (Harvey) wants to become the next Wesfarmers.” Wesfarmers portfolio includes businesses in the retail, mining and insurance sectors.
Perhaps Mr Harvey was seeking to capitalise on China’s growing demand for dairy products, but dairy prices are currently low, Ms Parsons said.
Mr Harvey also has extensive horse racing and breeding interests.
Harvey Norman shares closed 14 or 3.25 per cent lower at $4.17.