September 29, 2009
Australian regulator OKs CBH, Graincorp, ABB Grain port plans
Antitrust regulator the Australian Competition & Consumer Commission (ACCC) on Tuesday (September 29) approved undertakings by the nations'' three major grain export terminal operators covering access to their port facilities.
"The decision will ensure that there is fair and transparent access to grain ports operated" by Cooperative Bulk Handling Ltd., GrainCorp Ltd. and Ausbulk, a unit of ABB Grain, which since last week has been owned by Canadian-based Viterra Inc. ACCC said in a statement.
The decision will benefit Australian farmers and wheat exporters, while the access arrangements will unlock constraints at grain ports to the benefit of the wider economy and promote the development of a wheat exporting industry that is efficient, competitive and advances the needs of growers, the ACCC said.
CBH Chief Executive Andy Crane said the ACCCs decision gives growers in Western Australia state certainty regarding the operation of CBHs network during the company harvest and into the future.
"The ACCC has acknowledged our ability and intent to provide fair and equitable access to all port users," Crane said in a statement.
CBH has already introduced an independently operated online auction system that provides all exporters with access to securing shipping berths at ports and ensures allocation is driven by supply and demand, he said
Viterra''s Chief Operating Officer Fran Malecha said the ACCC decision should fill growers and marketers with confidence that the company is operating its ports with the intent of maximizing throughput for the benefit of all parties.
"We have a large harvest ahead of us and we look forward to working with all supply chain participants to handle the anticipated crop," Malecha said in a statement.
The ACCC decision comes after it twice rejected previous proposals by the three port terminal operators covering access to their facilities. The last rejection came as recently as Sep. 23.
The ACCC has formally advised industry regulator Wheat Exports Australia that the port access plans have been accepted, as this was a precondition for those companies to retain accreditation to export bulk wheat from Oct. 1, the statement said.
The ACCC said the access arrangements it approved for an initial period of two years aren''t prescriptive. Rather, they recognize a need to allow grain port operators the operational flexibility to run their grain supply chains efficiently, it said.
The arrangements don''t extend to upcountry supply chains, it said.
The arrangements approved by the ACCC include robust prohibitions against port operators anti-competitively discriminating in favour of their own wheat or hindering access to port terminal services; clear and transparent port loading protocols; obligations to negotiate in good faith; avenues for mediation or binding arbitration; and a set of clear and certain minimum non-price terms and conditions, the ACCC reported.
CBH operates a monopoly on wheat export terminals in Western Australia, while GrainCorp dominates the industry on the east coast, as does Viterra in South Australia.
Australia is a major global supplier of wheat, the export of which became more complex on July 1, 2008, when a longstanding monopoly arrangement operated by AWB Ltd. was abandoned in favor of a system that accredited multiple exporters.
