The Australian Competition and Consumer Commission has issued final determinations granting exemptions to Queensland Bulk Terminals (QBT) and GrainCorp from having to comply with Parts 3 to 6 of the Wheat Code at their Port of Brisbane bulk wheat port terminals.
“The ACCC considers that the two Brisbane port terminals face sufficient competition to warrant granting both operators exemptions from certain parts of the code when providing services at their Brisbane facilities,” ACCC Commissioner Cristina Cifuentes said.
“The ACCC’s analysis also indicates that the two Brisbane terminals have spare export capacity. Given the competition between them, this spare capacity would create incentives for both port operators to provide fair and transparent access to third party customers. Therefore, the full application of the code is not required.”
In coming to these decisions, the ACCC examined the way in which QBT’s and GrainCorp’s port terminals compete with each other for bulk wheat volumes. The ACCC also considered the level of competition in services across the supply chain, including competition from grain exports via containers.
The ACCC’s assessments found that QBT’s Brisbane facility faces strong and direct competition from GrainCorp’s facility. Similarly, the ACCC considers that GrainCorp’s facility faces competition from QBT, despite QBT’s facility having a lower level of capability. The ACCC also considers that GrainCorp and QBT face significant competitive pressure from containerised grain exports, which represent around 35 per cent of total wheat exports from the Port of Brisbane.
The ACCC intends to monitor use of the two Brisbane bulk wheat port terminal services to continue to assess the level of competition at these facilities into the future.
The ACCC’s full assessments of the Brisbane port terminals are set out in its final determinations document.
Background
The code, which commenced on 30 September 2014, regulates bulk wheat port terminal service providers to ensure that exporters have fair and transparent access to terminal facilities. Where appropriate, the ACCC may reduce regulation at a specific port terminal by exempting the relevant port terminal service provider from certain provisions of the code.
As a result of the exemptions, QBT and GrainCorp will not be subject to a number of the code’s provisions at their respective Brisbane facilities, including obligations to provide non-discriminatory access, resolve access disputes through prescribed processes, get ACCC approval for capacity allocation systems and publish certain information.
Exempt service providers are still obliged to deal with exporters in good faith and publish information about how capacity is allocated and the current state of the shipping stem.