Summary
The ACCC decided not to oppose the acquisition by Adsteam Marine Ltd of Newcastle Port Marine Linesmen.Market definition
The market for the supply of lines and mooring services to shipping operators at the Port of Newcastle.Competition analysis
The proposed acquisition would remove Adsteam's only competitor for the supply of lines and mooring services in the Port of Newcastle. In March 2006 the ACCC decided that the proposed acquisition is unlikely to substantially lessen competition because:-there appears to be a credible threat of new entry. Sunk costs are very low and there do not appear to be significant regulatory obstacles (port authority and berth operators' approvals). These approvals and the relevant skills could be acquired in the short-term. There is evidence of new entry to other NSW ports in recent years. Possible entrants include local stevedores, Port Waratah Coal Services (PWCS), Newcastle Port Corporation (NPC) and providers at other ports (in particular, Ausport Marine). However, volume-based national rebates provided to some large customers may be a barrier to entry;
-Adsteam's three largest customers at the Port of Newcastle, and PWCS or NPC, could sponsor a new entrant. In this regard, however, Adsteam may have the ability and incentive to price discriminate between larger and smaller customers, which represents a strategic barrier to entry; and
-the Port of Newcastle comprises approximately 1400 ship visits per year for which the total value of lines and mooring services is approximately $5m. Other broadly comparable ports have more than one supplier, suggesting that there would be incentive for new entry to the Newcastle market if prices rose above competitive levels.