Van Dairy sells farms to Prime Value for $62.5 million

Circular Head Mayor Daryl Quilliam and Greens Senator Peter Whish-Wilson - a long-time critic of the current ownership's management of what he calls Australia's most iconic dairy - both say they are optimistic owner Xianfeng Lu will use proceeds from the sale to Melbourne-based investment management company Prime Value to address the concerns.

"I don't think it's a coincidence he's sold these properties after disclosures of animal husbandry concerns and effluent and pollution issues in waterways," Senator Whish-Wilson said on Friday.

"There have been recurring management issues around maintenance, the need for investment and the need to repair and improve capacity in effluent systems.

"They are working with the Tasmanian regulator and Dairy Australia now and clearly they're working with Fonterra very closely to fix problems at Woolnorth.

"I've been on this guy's case for five years.

"He's raised the money; let's see it reinvested back in the property and the communities of the North-West.

"Now is his opportunity to do the right thing and honour his promises he made the Treasurer, the Foreign Investment Review Board and the Tasmanian people.

"I'm optimistic he's going to do that."

Cr Quilliam welcomed the sale news.

"They are all farms outside the gates of Woolnorth," he said.

"It is going to free up a fair amount of funding for him, so he should be able to spend a bit more money on Woolnorth itself."

Cr Quilliam said council staff and the Environment Protection Authority were monitoring Woolnorth.

He said "a fair bit" of remediation work had been done in recent times, but more was needed.

Cr Quilliam understood some of the sale proceeds would go towards improvements.

Chinese businessman Mr Lu bought Woolnorth in 2016 for $280 million.

His company, Van Dairy, said the farms which were sold were smaller farms and were sold as part of a commitment to have 10 per cent Australian ownership of the property.

The sale included 5000 cows and involved 2200 of the 19,000 hectares Mr Lu bought in 2016.

Mr Lu said the sale showed demand for dairy in the region was high.

"This shows that farming in North-West Tasmania is very popular," Mr Lu said.

He said annual rainfall in the region reached 1000 millimetres and the average annual temperature was about 12 degrees, which was very suitable for the development of the dairy industry.

Van Dairy said it earlier this year set aside more than 10 per cent of its total farm area (1800 hectares) to provide habitat for the Tasmanian devil.

"Setting aside this land, which was previously earmarked for development, was a significant financial investment for the company in the order of tens of millions of dollars," it said.

"The land is the equivalent of five dairy farms and 5000 cows."

A state government spokesperson said: "The Tasmanian government acknowledges the sale of 12 Van Dairy farms to Australian company Prime Value."

"This is understood to be in line with Van Dairy's commitment to have 10 per cent Australian ownership of the property.

"The Tasmanian Dairy Industry Association has been in contact with the purchaser of the farms to ensure they understand their dairy licensing obligations and any specific compliance obligations."