Co-operative Bulk Handling Limited - s.87B undertaking

Company or individual details

  • Co-operative Bulk Handling Limited
    29 256 604 947

Undertaking

The Australian Competition and Consumer Commission (ACCC) has accepted a court enforceable undertaking from Co-operative Bulk Handling Limited (CBH) in relation to its supply of grain receival, storage and handling services in Western Australia.

CBH is a co-operative, 100% owned by its 4,200 grower members in Western Australia.

The ACCC considers that between 2013 and 2016, CBH engaged in exclusive dealing conduct that had the effect, or likely effect, of substantially lessening competition in the West Australian grain transport market. The conduct involved CBH:

  1. Requiring growers to opt out of its integrated Grain Express service within seven days of the grower delivering each parcel of grain to a CBH receival site;
  2. designating 31 (reduced to 30 in January 2015) of its up-country storage sites as ‘Grain Express Only’ sites so that those sites were not available to users of CBH’s unbundled Non Grain Express services; and
  3. the price for the Non Grain Express service was set above the price of the Grain Express service (excluding transport charges) in most situations, with the price differential amounting to, in effect, a charge to opt out of the Grain Express service.

The ACCC considered that, in combination, the effect of these requirements was that growers and marketers would not, except to a limited extent, use the Non Grain Express services and acquire grain transport services from a competitor of CBH.

In 2016, CBH has begun offering new services for growers and marketers who use its storage and handling network including:

  • “CBH Site Select” - a service that will allow marketers to buy grain delivered to a CBH receival site and arrange a transport provider other than CBH to transport the grain to port or domestic customers; and
  • “CBH Integrated” - a fully integrated service managed by CBH from receival point to export or domestic markets

To address the ACCC’s concerns, CBH has undertaken to the ACCC that in offering its Site Select and CBH Integrated services it will, for the four harvest seasons commencing from the 2016/17 season:

  1. offer the Site Select service at all CBH receival sites that CBH opens with the exception of 11 designated Integrated Only sites and any new Integrated Only sites CBH builds; 
  2. allow growers and marketers up until 1 February in each season  to opt their grain out of the CBH Integrated service (provided the receival site is not a designated Integrated Only site); and
  3. price its Integrated and unbundled Site Select services as outlined in the undertaking and will only change its fees and charges for these services in accordance with the terms of the undertaking.