The Australian Competition and Consumer Commission has formally approved CBH, GrainCorp and Ausbulk’s grain port access arrangements. Ausbulk is the wholly owned subsidiary of ABB Grain that owns and operates the ports.
The decision will ensure that there is fair and transparent access to grain ports operated by CBH, GrainCorp and Ausbulk, to the benefit of Australian farmers and wheat exporters.
The access arrangements will unlock constraints at grain ports, to the benefit of the overall Australian economy. They will promote the development of a wheat export marketing industry that is efficient, competitive and advances the needs of wheat growers.
The decision follows the ACCC’s draft decisions of 6 August and 23 September 2009 that it would not accept the original proposals of the three grain port operators CBH, GrainCorp and Ausbulk, and a requirement that they revise their proposed access arrangements.
After extensive consultation with Australian farm groups, the port operators and other grain exporters, the arrangements approved today by the ACCC include:
- Robust prohibitions against each port operator anti-competitively discriminating in favour of its own wheat trading business or hindering access to its port terminal services, and the ability for the ACCC to order independent audits of each port operator’s compliance with the non-discrimination obligations.
- Clear and transparent port loading protocols that the port operators are obliged to follow in managing demand for the port terminal service, for example in making decisions about the allocation of shipping slots.
- Obligations on the port operators to negotiate in good faith with eligible wheat exporters around price and non-price offers of access to port terminal services.
- If negotiation fails, the ability of wheat exporters to seek mediation or binding arbitration on price and non-price terms of access to the port operators’ port terminal services.
- For those wheat exporters who wish to take a standard offer, a set of clear and certain minimum non-price terms and conditions of access to port terminal services, and an obligation on each port operator to publish its standard prices for port terminal services at least one month prior to commencement of each new wheat exporting season, and
- obligations on each port operator to publish certain port terminal information to provide greater transparency over its operations.
The access arrangements approved by the ACCC are not prescriptive. They recognise the need to allow the grain port operators the operational flexibility to run their grain supply chains efficiently, in a rapidly evolving environment which has transitioned from a single desk to 23 accredited wheat exporters within 12 months. But they will also ensure that other wheat exporters have fair and non-discriminatory access to the grain ports to export their own wheat.
The arrangements do not extend to ‘up-country’ supply chains, as the Wheat Export Marketing Act makes clear that the current process is intended to provide for access to the ports only. The government has indicated that it will be monitoring the situation up-country.
In light of the transitional state of the industry, the grain port access arrangements have been approved for an initial period of two years. The relatively short duration of the arrangements will ensure that future regulatory arrangements can adapt to any changes in the industry environment.
The ACCC has formally advised Wheat Exports Australia that CBH, Graincorp and Ausbulk have had port access arrangements accepted by the ACCC. This is a pre-condition for those companies to retain accreditation from Wheat Exports Australia to export bulk wheat beyond 1 October 2009.
The ACCC notes the extensive work done by port operators, farm groups and the wheat industry generally in recent months to develop revised access arrangements that are appropriate, prior to 1 October.
Further information about the ACCC’s decision to formally approve the access arrangements, together with information about the ACCC’s review of Australian grain port access arrangements, is set out in the ACCC’s final decision to accept access undertakings from CBH, GrainCorp and Ausbulk, available on the ACCC website via the ‘For Regulated Industries’ >> ‘Wheat Export’ link.