Agribusiness & Food, Logistics, Ports & Terminals

Two junior wheat exporters win wheat code exemptions

Australia’s competition watchdog plans to grant bulk wheat port code exemptions to Riordan Grain Services at the Port of Geelong and Semaphore Container Services at Port Adelaide.

The proposed exemptions will mean Riordan and Semaphore would not need to comply with some parts of the Port Terminal Access (Bulk Wheat) Code of Conduct, which applies to all grain handlers, but is targeted at major players.

Australian Competition and Consumer Commission commissioner Cristina Cifuentes said the exemptions would help the smaller businesses compete with their larger rivals.

“Riordan and Semaphore will both face significant competitive constraint from larger operations,,” Cifuentes said this week. “The ACCC’s preliminary view is that it is appropriate to grant exemptions to these smaller players.”

The wheat 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.

The ACCC is allowed to reduce regulation at specific terminals, where it deems it appropriate.

The decision announced this week is preliminary, and is open to submissions before July 7.

“These relatively new entrants into the market will increase choice for exporters of bulk wheat,” Cifuentes continued.

“The ACCC considers that the exemptions will provide them with greater flexibility to compete with the dominant providers.”

Riordan’s operations at the Port of Geelong compete with Emerald and GrainCorp. Without exemptions from the wheat code, the ACCC believes Riordan will continue to face strong competition for bulk wheat volumes from those terminals.

In Port Adelaide, Semaphore’s terminal will struggle to compete for wheat volumes from Viterra, the dominant provider of bulk wheat port terminal services in South Australia, and competition from LINX Cargo Care’s Port Adelaide facility.

If the preliminary rulings in each case are finalised, the respective terminals will be excluded from conditions including obligations to provide non-discriminatory access, resolve access disputes through prescribed processes, get ACCC approval for capacity allocation systems and to 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, the ACCC said.

Exempt service providers must also comply with general competition law.

Leave a Reply

Send this to a friend