ACCC proposes to grant exemptions to two wheat port terminals at the port of Brisbane

27 August 2015

The Australian Competition and Consumer Commission has released draft determinations proposing to exempt Queensland Bulk Terminals (QBT) and GrainCorp from having to comply with Parts 3 to 6 of the Wheat Code at their Port of Brisbane bulk wheat port terminals.

“The ACCC’s draft view is that the two Brisbane port terminals face sufficient competitive pressures to warrant granting both port terminal operators exemptions from certain parts of the Code when providing services at their Brisbane facilities,” ACCC Commissioner Cristina Cifuentes said.

The ACCC examined the way in which QBT’s and GrainCorp’s port terminals compete with each other for bulk wheat volumes. The ACCC also considered the level of competition in services across the supply chain, including competition from grain exports via containers.

The ACCC’s preliminary assessments found that QBT’s Brisbane facility faces strong and direct competition from GrainCorp’s facility. Similarly, the ACCC considers that GrainCorp’s facility faces competition from QBT, despite QBT’s facility having a lower level of capability. The ACCC also considers that GrainCorp and QBT face significant competitive pressure from containerised grain exports, which represent around 35 per cent of total wheat exports from the Port of Brisbane.

“The ACCC’s draft analysis also indicates that the two Brisbane terminals have spare export capacity. Given the competition between them, this spare capacity would create incentives for both port operators to provide fair and transparent access to third party customers in the absence of full regulation,” Ms Cifuentes said.

“The ACCC has therefore made draft determinations that the full application of the Code is not required at QBT’s and GrainCorp’s Brisbane terminals.”

If the ACCC makes final determinations to exempt QBT and/or GrainCorp in relation to their Brisbane terminals, the ACCC will undertake monitoring of the two Brisbane bulk wheat port terminal services to continue to assess the level of competition at these facilities into the future.

The ACCC’s full draft assessments of the Brisbane port terminals are set out in its draft determinations document.

The ACCC invites submissions from interested parties on its draft determinations. The closing date for submissions is Thursday 10 September 2015.

Background       

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 final determinations to grant exemptions for QBT’s and GrainCorp’s respective Brisbane facilities, the port operators will not be subject to a number of the Code’s provisions at these ports, including 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.

Release number: 
MR 156/15
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