Draft notice proposing to revoke GeelongPort notification

The Australian Competition and Consumer Commission has issued a draft notice proposing to revoke an exclusive dealing notification* lodged by GeelongPort Pty Limited.

"The ACCC is proposing to remove the immunity for an exclusive dealing arrangement being conducted by GeelongPort believing it substantially lessens competition and is not in the public interest," ACCC Chairman, Mr Graeme Samuel, said today.

The arrangement involves GeelongPort providing access to Lascelles Wharf in Geelong on condition that customers use GeelongPort's shore-based figee cranes when they are available to unload fertiliser and other dry bulk cargos. Customers are also required to use GeelongPort's other bulk discharge equipment, hoppers and grabs, in conjunction with the figee cranes.

GeelongPort submits that if it can't require customers to use the figee cranes when they are available, it expects the volume of cargo discharged using ship's gear (vessel-mounted cranes) will grow. GeelongPort says it is concerned that the slower discharge rate of ship's gear will have a negative impact on port efficiency.

In this instance, however, the ACCC is not satisfied that imposing such a requirement on customers is likely to result in significant efficiency gains at Lascelles Wharf, particularly as the majority of customers are likely to use the figee cranes regardless. Even when the faster figee cranes are used, other factors such as customer receival rates can reduce the unloading rate at the wharf.

"The ACCC is particularly concerned because this arrangement restricts customers from choosing to use ships' gear where they consider it efficient to unload fertiliser and other dry bulk cargoes at Lascelles Wharf, and consequently, from hiring mobile discharge equipment from competitors of GeelongPort. This imposes a significant barrier to existing and future suppliers of bulk discharge equipment from operating at Lascelles Wharf.

"The ACCC believes this arrangement is likely to result in a substantial lessening of competition for the provision of bulk cargo unloading equipment at the Port of Geelong. Customers being prevented from choosing between alternative suppliers of bulk discharge equipment based on price and other commercial considerations will lead to higher port costs for some customers and the removal of competitive pressure on GeelongPort," Mr Samuel said.

The ACCC is now seeking further submissions from interested parties in respect of the draft notice.

More information regarding the notification and a copy of the draft notice will be available at the ACCC website, by following the links to Public registers and Authorisations and notifications registers and Exclusive dealing notifications register.

Background

* Parties may obtain immunity from legal action in respect of exclusive dealing conduct by lodging an exclusive dealing notification with the ACCC. Immunity is conferred automatically after the notification is validly lodged. The ACCC may issue a notice revoking an exclusive dealing notification if it is satisfied that the conduct has the purpose or effect, or is likely to have the effect, of substantially lessening competition in any market and that the benefit to the public that has resulted or is likely to result from the conduct would not outweigh the detriment to the public likely to result from the conduct. Before issuing such a notice, the ACCC must first issue a draft notice outlining the reasons why it proposes to revoke the notification.