ACCC criticises CBH's transport requirements

ACCC plans to revoke Cooperative Bulk Handling’s notification that requires some grain growers to use the company transport services

December 9, 2010

The competition watchdog is planning to revoke Cooperative Bulk Handling’s (CBH) policy that orders some grain growers to use its transport services in Western Australia.

The Australian Competition and Consumer Commission (ACCC) wants to give growers greater choice in how they move their grain to port.

ACCC Chairman Graeme Samuel says CBH currently requires growers that use its up-country storage facilities to also use its transport services when taking grain to port for export.

Samuel claims the policy restricts competition of supply transport services to customers using CBH’s storage facilities. CBH owns around 90 per cent of up-country storage facilities in Western Australia and also owns and operates the state's four port export terminals.

"By leveraging its dominance of up-country storage to force growers to use its transport services CBH can insulate itself from competition," Samuel says.

He says interested parties have complained of the practice and want the opportunity to explore alternatives to put competitive pressure on CBH.

"Importantly the ACCC's draft notice only relates to CBH's conduct in forcing growers who use its up-country storage and handling facilities to also use its transport services," Samuel says.

"If the ACCC revokes the notification CBH will still be able to offer a bundled receival, storage, handling and transport service. All that will change is that growers who store their grain with CBH will be free to choose whether to use CBH's transport services or organise their own."

CBH and other stakeholders have been asked to provide feedback to the ACCC on its plan before a final decision is made on whether to implement it.

The ACCC has the power to revoke policies if it believes they are anti-competitive and do not deliver public benefits.

Before revoking a policy, the ACCC must first issue a draft notice to give affected parties the opportunity to respond.

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