Qube Holdings Limited’s proposed acquisition of Melbourne International RoRo & Auto Terminal Pty Ltd (MIRRAT) was not opposed by the ACCC, after accepting a court-enforceable undertaking to remedy competition concerns.
The court-enforceable undertaking accepted by the ACCC prevents Qube, its subsidiary Australian Amalgamated Terminals Pty Ltd (AAT) and MIRRAT from discriminating against downstream rivals at Webb Dock West at the Port of Melbourne.
The undertaking will also impose additional obligations on AAT for its operations at Port Kembla in NSW, Fisherman Islands in Queensland and Appleton Dock in Melbourne. The new undertaking will replace both the existing AAT undertaking and MIRRAT’s existing undertaking concerning its operations at the automotive terminal at Webb Dock West.
The ACCC’s investigations focused on the impact on competition in downstream services at the Port of Melbourne from the acquisition.
“The ACCC concluded that, in the absence of adequate safeguards, Qube, through its ownership of MIRRAT, would likely have the ability and incentive to discriminate against rival stevedores and PDI providers at Webb Dock West,” ACCC Chair Gina Cass-Gottlieb said.
MIRRAT operates the automotive/roll-on roll-off terminal at Webb Dock West in Melbourne. The proposed acquisition would permit Qube to control the operation of the automotive roll-on roll-off trade through the Port of Melbourne.
Qube, through its wholly owned subsidiary, AAT, operates automotive cargo terminals at the Port of Brisbane and Port Kembla, as well we a general cargo terminal at Appleton Dock at the Port of Melbourne.
“The ACCC also closely considered whether, by operating all three of the major east coast automotive terminals, Qube, through AAT and MIRRAT, could have an increased ability and incentive to discriminate against rivals at each of the terminals in a way that would harm downstream competition,” Gina said.
“With these significant concerns in mind, the ACCC only decided not to oppose the acquisition with a strong court-enforceable undertaking from Qube, AAT and MIRRAT.”
The undertaking requires AAT and MIRRAT to meet the following obligations:
- Not to discriminate between terminal users in favour of its own interests in the automotive supply chain,
- Provide for certain price and non-price dispute resolution processes,
- Comply with access and berthing allocation rules, as well as ring fencing of certain confidential information,
- Report periodically on its compliance with the undertaking and facilitate independent oversight (including independent auditors),
- Comply with restrictions on AAT’s and MIRRAT’s ability to introduce or change certain tariffs.
“Long-term behavioural remedies come with particular risks and uncertainty. The ACCC is not generally supportive of such undertakings. This is why we have carefully assessed these risks when deciding whether to accept the undertaking in this matter.”
“In the unique circumstances of this transaction, where there is already a similar undertaking in other ports, and where MIRRAT itself is already subject to an undertaking due to its existing vertical integration with shipping, after careful consideration we decided to accept the undertaking,” Gina explained.
The new undertaking will cover all of AAT and MIRRAT’s east coast automotive terminals and is expected to be in place perpetually.