The Australian Competition and Consumer Commission has released draft determinations proposing to exempt Riordan Grain Services and Semaphore Container Services from certain parts of the mandatory Bulk Wheat Code in relation to their respective operations at the Port of Geelong and Port Adelaide.
“Riordan and Semaphore will both face significant competitive constraint from larger operations. The ACCC’s preliminary view is that it is appropriate to grant exemptions to these smaller players,” ACCC Commissioner Cristina Cifuentes said.
“These relatively new entrants into the market will increase choice for exporters of bulk wheat. The ACCC considers that the exemptions will provide them with greater flexibility to compete with the dominant providers.”
Riordan’s operations at the Port of Geelong compete with the dominant providers of bulk wheat port terminal services in Victoria, Emerald and GrainCorp. The ACCC considers that, in the absence of full regulation under the Code, Riordan will continue to face strong competition for bulk wheat volumes from Emerald’s and GrainCorp’s terminals.
In relation to Semaphore, the ACCC’s preliminary assessment is that Semaphore will continue to face strong competition for bulk wheat volumes from Viterra, the dominant provider of bulk wheat port terminal services in South Australia, and competition from LINX Cargo Care’s Port Adelaide facility.
The ACCC’s views in relation to the Riordan operation at Port of Geelong is set out in its Riordan draft determination document.
The ACCC’s views in relation to the Semaphore operation at Port Adelaide is set out in its Semaphore draft determination document.
The ACCC invites submissions from interested parties on both draft determinations. The closing date for submissions is Friday 7 July 2017.
The proposed exemptions will mean Riordan and Semaphore would not need to comply with some parts of the Port Terminal Access (Bulk Wheat) Code of Conduct.
The Code, which commenced on 30 September 2014, regulates bulk wheat port terminal service providers to ensure that exporters have fair and transparent access to terminal facilities. Where appropriate, the ACCC may reduce regulation at a specific port terminal by exempting the relevant port terminal service provider from certain provisions of the Code.
If the ACCC makes a final determination to grant exemptions to Riordan and Semaphore they will not be subject to a number of the Code’s provisions at their respective facilities. These include obligations to provide non-discriminatory access, resolve access disputes through prescribed processes, get ACCC approval for capacity allocation systems and publish certain information.
Exempt service providers are still obliged to deal with exporters in good faith and publish information about how capacity is allocated and the current state of the shipping stem. Exempt service providers must also comply with general competition law.