The ACCC has announced it will not oppose the proposed acquisition of Flinders Logistics by rail freight giant Aurizon, following a restructure of the transaction to address the ACCC’s initial competition concerns.
Flinders Logistics operates a stevedoring and logistics business for bulk and limited break-bulk cargo at Port Adelaide and Port Pirie, with its operation of Port Adelaide’s Berth 29 critical in the initial raising of competition concerns.
Port Adelaide is the most significant port in South Australia and facilitates the import and export of a variety of goods, including minerals, grain, motor vehicles, petroleum and generalised cargo.
Flinders Logistics is a wholly owned subsidiary of Flinders Port Holdings, which owns and operates seven ports in South Australia, including Port Adelaide and Port Pirie.
A statement of issues was initially released on July 11th, 2024. ACCC Commissioner Dr Phillip Williams says those concerns have now been put to bed and the acquisition can progress.
“We were concerned that after the acquisition, Aurizon would have the exclusive right to load and unload all trains at Berth 29, Port Adelaide,” Dr Williams says.
“Having this exclusive right was concerning to us, because it may have provided Aurizon with the ability and incentive to limit the access of competing rail haulage providers.
“This could have resulted in the substantial lessening of competition in the supply of rail haulage services for the import or export of containerised bulk minerals on behalf of customers in South Australia and western New South Wales and Victoria.
“Under the new transaction structure, rival rail haulage providers will no longer be required to rely on Aurizon to load and unload their trains, which will mean other logistics companies will be able to compete to supply mining customers.
“The ACCC carefully examined and consulted on the changes and has concluded that the acquisition is now unlikely to result in a substantial lessening of competition.”
Under the new structure, Flinders Port Holdings – the parent company of Flinders Logistics – will retain control of the rail pad and operate it as a common user asset.
An access policy will be published on Flinders Ports’ website.
Third parties will be able to apply for non-exclusive licences to use the rail pad for the servicing of trains during specified windows and for short-term container storage.
Without the restructure, Aurizon would have retained an exclusive lease of that area.
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