Concerns about ANZ Terminals, GrainCorp deal

25 July 2019

The ACCC has released a statement of issues raising preliminary concerns about ANZ Terminals’ proposed acquisition of GrainCorp Liquid Terminals Australia Pty Ltd (ASX:GNC).

ANZ Terminals and GrainCorp both provide port-side bulk liquid storage services in New South Wales, Victoria and South Australia, where they compete to store liquids including edible oils, tallow, non-flammable industrial chemicals and base oils for customers.

“Our preliminary view is that the acquisition will remove a significant competitor in what is an already concentrated industry in NSW, Victoria, and South Australia,” ACCC Chair Rod Sims said.

“We are also considering the impact on competition in the east coast states more broadly, including Queensland.”

“In some locations, the acquisition will lead to ANZ Terminals becoming the only storage provider for some liquid products. This loss of competition could result in higher prices for customers, or lower levels of service,” Mr Sims said.

The ACCC considers that there is limited vacant land available for lease by new storage providers at the ports, creating a key barrier to entry for potential new competitors.

“Even where land may be available, it is highly uncertain that any new entrants would emerge in the bulk liquids sector to challenge ANZ Terminals,” Mr Sims said.

ANZ Terminals has provided a section 87B undertaking to divest the Osborne terminal in South Australia. The ACCC is still considering whether the undertaking will address the competition concerns in South Australia.

“The proposed undertaking does not address the preliminary concerns we have in New South Wales and Victoria,” Mr Sims said.

The ACCC invites submissions from interested parties on the statement of issues by 8 August 2019. The ACCC’s final decision is scheduled for 17 October 2019.

The statement of issues is available at ANZ Terminals Pty Ltd proposed acquisition of GrainCorp Liquid Terminals Australia Pty Ltd

Background

ANZ Terminals is a wholly owned subsidiary of Helios Investments Australia Pty Ltd, which is a wholly owned subsidiary of Hyperion Investments Australia Pty Ltd.

ANZ Terminals provides bulk liquid storage services, specialising in the storage and handling of bulk liquid edible oils and fats, petroleum products and industrial chemicals for third party customers.

ANZ Terminals will also acquire GLT’s bulk liquid storage facilities in Queensland, Tasmania and Western Australia, but ANZ Terminals does not currently have a presence in those states.

GLT is a wholly owned subsidiary of GrainCorp Commodity Management (Holdings) Pty Ltd, a wholly owned subsidiary of GrainCorp Limited (GNC). The business of GLT includes activities across the edible oils and fats supply chain.

GLT stores and handles the bulk liquid requirements for GNC, as well as providing these services to third party customers for edible oils and fats, petroleum products and industrial chemicals.

Release number: 
122/19
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