ACCC: Industry Members Voice Concerns Over Asciano Sale

- May 27, 2016-

The sale of the Australian freight logistics company Asciano Limited has given rise to a number of concerns, which include the possibility of preferential access and raising rivals’ costs at the Patrick container terminal by future owners, the Australian Competition and Consumer Commission (ACCC) said.

Namely, the proposed acquisition by a consortium comprising Qube Holdings Ltd, Brookfield Infrastructure Partners LP (Brookfield) and a group of global private equity and pension funds, was put under review by the ACCC on March 30, and attracted numerous submissions from industry stakeholders expressing a broad range of concerns.

“Market participants have expressed concerns about the vertical integration of Patrick container terminals with the two largest landside import-export container logistics providers in Australia, Qube and ACFS. The ACCC considers this to be a significantly greater degree of vertical integration than the current situation where Patrick is vertically integrated with only ACFS,”  ACCC Chairman Rod Sims said.

Furthermore, he said that the ACCC is concerned that Patrick container terminals may provide preferential access to Qube and ACFS vehicles, and Qube regional export trains running into Port Botany, and raise rivals’ costs as Qube and Brookfield will each own 50 per cent of Patrick container terminals, and may have “parallel incentives to favour their landside logistics operations.”

Sims added that there are also concerns regarding foreclosure of rival stevedores.

“Market participants have suggested that if Patrick gives favourable treatment to the container logistics operations of both Qube and ACFS, then Qube and ACFS may provide a superior service offering to importers and exporters on condition that they use shipping lines calling at Patrick container terminals. This may lessen competition in stevedoring,” he said.

The ACCC has now invited further submissions from industry participants on the likelihood of competition being lessened in container landside logistics at each port, the provision of regional rail container export services into Port Botany, and stevedoring.

The commission said it expects to announce its final decision on July 21, 2016.

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