The Australian Competition Tribunal has affirmed the Australian Competition and Consumer Commission’s decision to revoke Co-operative Bulk Handling Limited's (CBH's) exclusive dealing notification, which allowed CBH to require Western Australian grain growers and marketers who use its 'up-country' storage facilities to also use its transport services to deliver grain to port for export.

“The Tribunal’s decision means that for the first time since deregulation of wheat export marketing in 2008, growers and marketers in Western Australia will be free to make their own arrangements for transporting grain to port for export” ACCC Chairman Rod Sims said.

“Importantly, the decision does not affect CBH’s ability to continue to offer Western Australian growers a bundled storage and transport option, currently known as Grain Express. The effect of the Tribunal’s decision is simply that growers and marketers storing grain with CBH will no longer be forced to use CBH’s Grain Express system to move their grain.”

In 2008 CBH lodged a notification with the Australian Competition and Consumer Commission in relation to this conduct. Notifications provide statutory protection for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010 (formerly the Trade Practices Act 1974).

In June 2011, the ACCC revoked CBH’s notification, removing the statutory protection from legal action for CBH to engage in the notified conduct. The ACCC revoked the notification because it was concerned that the conduct foreclosed competition for the supply of grain transport services. CBH sought a review of the ACCC’s decision by the Tribunal.

The Tribunal concluded that the notified conduct substantially lessened competition for the supply of grain transport services in Western Australia and that any benefits in CBH controlling all grain movements did not outweigh the public detriment resulting from the substantial lessening of competition. 

Revocation of the notice will come into effect on 20 May 2013. 

Written reasons for the Tribunal’s decision have not yet been publicly released, as confidentiality orders in relation to some parts of the judgment are being finalised. 

Background

Businesses may obtain protection in relation to conduct that might be at risk of breaching the exclusive dealing provisions of the Competition and Consumer Act 2010 by lodging a notification with the ACCC. Once lodged, protection for the notified conduct begins automatically, or in the case of third line forcing, after 14 days.

The ACCC may revoke a notification if it is satisfied that the conduct has the purpose, effect or likely effect of substantially lessening competition and that it does not deliver a net public benefit.

A person dissatisfied with the giving of a notice revoking a notification may apply to the Australian Competition Tribunal for review of the notice.