Companies claim existing constraints on their market power justifies exemption from code governing wheat terminal access.
GrainCorp and Emerald are attempting to gain exemptions from a new mandatory code regulating bulk wheat terminal access at their Victorian facilities.
Both companies have lodged exemption applications with the Australian Competition and Consumer Commission (ACCC) for their respective ports. If approved, GrainCorp will be exempt from complying with the code at its Geelong and Portland terminals, while Emerald’s application applies to its Port of Melbourne terminal.
In their applications, GrainCorp and Emerald claim their Victorian terminals compete against each other and that this limits their ability to exercise market power. Furthermore, they say the ports have excess export capacity and that the domestic market, container exports, and prospective port developments limit their ability to exercise market power.
The access code began on September 30 to ensure exporters have fair and transparent access to terminal facilities, but the ACCC has the power to exempt a terminal service provider from certain provisions.
“The ACCC will assess the level of competition faced by each facility and make its determination against the relevant matters set out in the code,” it says.
“If the ACCC grants an exemption, an exempt service provider will not be subject to a number of code provisions, including a non-discrimination requirement, dispute resolution processes, ACCC approval of capacity allocation systems, and certain reporting requirements.”
However, the ACCC says exempt service providers are still required to deal with exporters in good faith and publish a port loading statement and loading procedures.
The agency is now seeking feedback from industry on the exemption applications by January 30, 2015 before a decision is made.
“The ACCC is seeking views on a range of factors including the relevant markets for consideration, the extent of competition in services across the supply chain, and the likely impact on third party exporters,” ACCC commissioner Cristina Cifuentes says.