The Australian Competition and Consumer Commission announced today that it would not oppose the proposed joint venture between Grainco Australia and ConAgra Trade Group to form MarketLink. The joint venture would involve MarketLink performing the grain trading/marketing operations of both parties in Australia.
The ACCC conducted comprehensive market enquiries and received submissions from some growers, traders and customers in the grain industry.
The ACCC looked closely at the transaction given that the MarketLink joint venture proposal involved a trader with statutory marketing powers which also provides storage and handling services in several states, together with another significant trader in the Australian grain market. The ACCC is concerned to see that any arrangements between players in the Australian grain industry do not adversely effect competitive outcomes for grain industry participants.
In the past the ACCC has looked closely at transactions where bulk handling operators enter marketing arrangements or strategic alliances with grain traders who hold statutory marketing powers. In this case the transaction in Queensland would result in the amalgamation of two traders, one of which is also the state’s most significant storage and handling facility operator but whose statutory powers in relation to exporting grain will sunset in June this year.
In NSW the MarketLink transaction will involve a relationship between one trader (CTG) and a major trader holding statutory marketing powers and which also operates some storage and handling facilities. Grainco's statutory marketing powers are in place until 2005.
The result of extensive market enquiries indicated to the ACCC that the proposed MarketLink joint venture was unlikely to lead to a substantial lessening of competition in any market.