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Bingo takeover attracts closer look from ACCC

Watchdog to examine vertical integration and market concentration in Sydney

 

Bingo Industries’ proposed acquisition of Dial-a-Dump Industries (DADI) has hit a speed bump in the form of Australian Competition and Consumer Commission (ACCC) concerns.

The waste transport and processing giant looked to have boosted its fleet by 55 units in August but this consolidation in the waste logistics space has spurred the competition regulator’s concern.

Bingo and Dial-a-Dump supply building and demolition (B&D) waste collection and processing services in the greater-Sydney area, the ACCC points out.

Bingo and Dial-a-Dump are also future competitors for non-putrescible, or dry, landfill services when Bingo’s Patons Lane facility becomes operational next year.

The ACCC’s move should have come as no surprise, given its warning in April that further consolidation in the sector would attract heavy scrutiny.


Read about how the acquisition looked to the parties at the time, here


Along with flagging that it would take a closer look at the deal’s implications, the ACCC released a statement of issues (SOI) on the case.

“Post-acquisition, Bingo would be the largest B&D waste collector and processor and own a substantial amount of dry landfill capacity in Sydney,” ACCC chair Rod Sims says.

“We are concerned about the effect of the proposed acquisition in relation to processing, landfill and collections.

“Our preliminary view is that the acquisition would remove Bingo’s most substantial competitor for B&D waste processing, particularly in the Eastern Suburbs and inner Sydney.

“Although alternative facilities exist, our current view is that many are not viable alternatives as they either will not accept third party mixed B&D waste, charge significantly more for heavy loads, or are too far away to constrain Bingo from increasing prices.”

“The acquisition would remove future competition between Bingo’s and Dial-a-Dump’s dry landfills, which may lead to higher gate fees than would be likely without the acquisition.

“Competition between Sydney landfills is likely to become more important after the introduction of the Queensland landfill levy, which will make transporting waste to Queensland more expensive.”

The watchdog considers the three levels of the supply chain – collection, processing and landfill – to be also linked closely, raising vertical integration issues.

Collectors rely on access to processing facilities at competitive rates to compete for customers, and processors rely on access to landfill. 

The ACCC invites submissions from interested parties on the statement of issues by December 13. The ACCC’s final decision is scheduled for February 21.

Bingo says the SOI is a preliminary view by the ACCC of its investigations into the proposed transaction and that it has “worked closely with the ACCC over the past few months and will continue to collaborate with the regulator to address any competition concerns”.

“We strongly disagree with the preliminary competition concerns raised in the ACCC’s SOI,” Bingo MD and CEO Daniel Tartak says.

“We remain firmly of the view that the acquisition would not have the effect of substantially lessening competition in the Greater Sydney market.

“We provided the ACCC with an extensive data set, supported by a number of industry-leading experts, demonstrating this.”

 

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