Australia’s competition watchdog is seeking submissions from wheat export stakeholders about Viterra’s revised port allocation auction system
July 23, 2012
Australia’s competition watchdog is seeking submissions from wheat export stakeholders as about Viterra’s revised auction system for port capacity allocation.
The Australian Competition and Consumer Commission (ACCC) said in April it would work with the wheat industry to iron out bugs in the grain handler’s newly proposed system.
Under the Access Undertaking accepted by the ACCC in September 2011, Viterra must replace its ‘first in, first served’ capacity allocation system with an auction system.
However in April this year the ACCC objected to Viterra’s initial proposal because it was too similar to the system currently
utilised in Western Australia, where recent auctions have highlighted a number of operational problems.
“[In Western Australia] Large volumes of port terminal capacity remained unallocated through auction, despite the record breaking crop harvested last season,” says ACCC chairman Rod Sims.
Viterra’s revised proposal changes the way in which auction proceeds are rebated to exporters and makes changes to auction rules.
It also changes the rules around the ‘secondary’ first in, first served system, to allow auctions to conclude more quickly and prevent gaming.
“In designing the revised auction proposal, Viterra has sought to address the ACCC’s concerns as outlined in its Auction Objection Notice,’ Sims says.
“The ACCC is mindful that the industry is currently considering how to respond.
“This is an industry-wide problem and more time is required to properly explore potential solutions.”
Access undertakings are intended to ensure that third party exporters are able to access the port terminals operated by vertically integrated port terminal operators, ensuring competition in the market for the export of bulk wheat.
Further information on Viterra’s revised auction proposal and how to make written submissions is available on the ACCC’s website.