Apples in a globalised world

Apples in a globalised world

Batlow Fruit’s new and highly profitable ‘Bravo’ apple variety requires replanting the orchards, which requires significant investment.

There was cause for celebration in Batlow last week: the growers that make up the Batlow Fruit Cooperative unanimously voted ‘Yes’ to a buy-out from investor group AusFarm Fresh, which will be injecting $10 million into their orchards and ensuring their competitive edge well into the future.

As everyone around here knows, Batlow grows the premium apples in Australia. But growing produce is a different game in the 21st century to what it was when the co-op started up nearly 100 years ago. Now, growers are competing against an oversaturated market; more orchards utilising new methods that are expensive to implement; and a stricter regulatory environment.

The buy-out is a win-win – the investors get a loved and respected brand that has proven itself to be profitable with close to a century of experience, and the Batlow Fruit growers get access to the kind of money they need to ensure they keep kicking for another century or so.

However, it is also a powerful example of just how complicated and international the business of being a profitable enterprise is in 2017.

The majority shareholder in the Batlow Fruit Company will soon be AusFarm Fresh, a new Australian-based company that popped up in late 2015. AusFarm Fresh, in turn, is owned by Isola Capital Belgium. AusFarm Fresh has an Australian address, Australian assets primarily consisting of orchards in Queensland, and a management structure populated by Australians. However, it is defined by the Australian Securities and Investment Commission (ASIC) as a “Small Proprietary Company That Is Controlled By A Foreign Company,” and its majority shareholder is Isola Capital Belgium.

Continuing up the chain, Isola Capital Belgium is a subset of the Isola Capital Group, a private investment and asset management firm with headquarters in Hong Kong, offices in Belgium and the Bahamas, and major shareholders drawing from blue-blood families and companies across Europe and Asia.

The firm represents people with the sort of money readers of this paper can only dream about. Their core eight member investment team draw from experience in Taiwan, Silicon Valley, Russia, Singapore, London, and elsewhere. The bio for their CEO, Anthony Chan, casually brags that prior to taking up the leadership of Isola Capital he completed $10 billion worth of investment banking transactions with Credit Suisse, Citigroup, and Lehman Brothers Asia. The company was included in the ‘Panama Papers’ leak, which suggested it was one of over 100,000 cashed-up entities funnelling their clients’ money through offshore tax havens. One of its core features is the ‘Investor Roundtable,’ an invite-only private club for the super-rich to share “investment opportunities” and “strategic information.” They are, in short, rolling in it.

The buy-out is unreservedly a positive for the co-op, but it is also a clear illustration of the dizzying networks money flows through in the 21st century. Something as simple as growing and selling apples now involves a four-tiered investment chain, at least four continents, and being plugged into a complex global web of wide-ranging investments and assets that would be impossible to fully track even if you tried.

It is somewhat disorienting that the financial security underpinning a major employer and vital life-force for the Batlow community can rest on the fortunes of a group of people enjoying the most privileged pockets of the world, who have almost certainly never heard of Batlow, the Batlow Fruit Cooperative, or anything to do with this little section of Southern NSW.

Not necessarily worrying and indeed largely exciting, but disorienting. Whether it’s through Visy, the timber market, or now the Batlow apple orchards, in 2017 the successes and failures of our small communities are well and truly tied up in the world economy.