ACCC issues draft decision on CBH wheat port undertaking variations

3 July 2013

The Australian Competition and Consumer Commission has issued a draft decision proposing to agree to Co-operative Bulk Handling Limited’s (CBH) proposed changes to its auction system, which allocates capacity to exporters using CBH’s bulk-grain port terminals in Western Australia.

The ACCC does not propose to consent to a proposed clause enabling CBH to buy back capacity after it has been allocated but is seeking industry’s views on a revised buyback process recently proposed by CBH.

“The ACCC considers that the auction changes improve the current auction system and acknowledges CBH’s intention to address issues experienced in previous auctions,” ACCC Commissioner Joe Dimasi said.

“However, the ACCC has concerns about the proposed approach to buying back capacity and seeks industry’s views on CBH’s recent proposed changes.”

Capacity allocation is a critical element of CBH’s Port Terminal Services Access Undertaking, which was accepted by the ACCC in 2011. The undertaking regulates how CBH will provide port access to its bulk-wheat export competitors and the ACCC has the ability to object to changes to the undertaking.

While the ACCC considers the auction system aspects of CBH’s undertaking variations are appropriate, the ACCC has concerns about the originally proposed buyback process. CBH has provided a revised buyback clause that attempts to address concerns raised by interested parties and the ACCC.

The ACCC has published a draft decision setting out its preliminary view regarding CBH’s application to vary its undertaking. The ACCC is seeking comments from stakeholders on its draft decision and in particular on CBH’s revised buyback process. Submissions should be provided by 17 July 2013.

The ACCC is working with CBH to have the variations in place before the port capacity auctions for the 2013/14 marketing year.

The ACCC has a role in approving access undertakings for port terminal operators who also have bulk wheat exporting operations. The undertakings are intended to ensure that competing exporters are able to access the ports, ensuring fair competition in the market for the export of bulk wheat.

The ACCC’s draft decision and CBH's revised buyback process will be available at Co-operative Bulk Handling 2011

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