On 23 August 2006 the ACCC announced that it would not oppose the recent saleyard acquisitions by Victorian Livestock Exchange Ltd (VLE). The acquisitions included the Sale and Korumburra saleyard businesses and the Yarram saleyard property.
The ACCC considered that the existence of alternative saleyard facilities in the Gippsland region of Victoria, particularly Warragul and Bairnsdale, and to a lesser extent the existence and potential use of alternative livestock-selling methods would provide a degree of competitive constraint on VLE.
The decision came after the ACCC issued a Statement of Issues in relation to the acquisitions, which invited further information and comment on the provision of saleyards and saleyard services in the Gippsland region and across Victoria. Market responses confirmed that regular users of saleyard services, including agents, buyers and some large sellers, are able to exercise countervailing power in their dealings with VLE. Other responses also indicated that consolidation in the industry, along with a higher standard of service, would be likely to attract more livestock buyers and sellers, making the auction system more competitive.
VLE owns and/or operates saleyards at Pakenham, Koonwarra (Leongatha), Traralgon and Yarram, and provides other livestock services throughout Gippsland and neighbouring regions.
On 16 August 2006 the ACCC announced that it would oppose the proposed acquisition of UNiTAB by Tabcorp. The ACCC considered that the proposed acquisition was likely to substantially lessen competition in a number of markets related to wagering in Australia.
Tabcorp is the largest wagering operator in Australia, currently holding exclusive totalisator (that is, pari-mutuel) wagering licences in Victoria and New South Wales. UNiTAB is the second-largest wagering operator in Australia, currently holding exclusive totalisator licences in Queensland, South Australia and the Northern Territory.
If the proposed acquisition were to proceed, the ACCC considered that Tabcorp would control all the major totalisator pools in Australia. The ACCC's key competition concerns resulting from the proposed acquisition included, but were not limited to, the following:
Competition for future wagering licences, and therefore competition in wagering markets, would be substantially lessened. Tabcorp's current pari-mutuel wagering licence in Victoria expires in 2012. Furthermore, the exclusive licence arrangements currently in place in NSW expire in 2013, potentially opening that market for competitive licence applications. The ACCC considered that if the merger did not proceed, Tabcorp and UNiTAB were likely to be competitive applicants for the licences.
The proposed acquisition would substantially lessen competition in the national market for the supply of the right for TABs to combine their totalisator pools. Currently, the TABs in Western Australia, Tasmania and the ACT combine their pools with Tabcorp's Victorian totalisator pool, so as to reduce potential volatility in odds, which can occur when large bets are made. The three TABs pay Tabcorp fees for this right. The proposed acquisition would remove UNiTAB as the only alternative supplier of these pooling services in Australia. This would also have significant consequences for potential new entrants to wagering markets.
Tabcorp offered a s. 87B undertaking to address competition concerns arising from the proposed acquisition, with particular reference to pooling services. However, the ACCC had serious concerns about the practical operation of the undertaking offered by Tabcorp.
