ACCC proposes exemption for two Viterra grain port terminals

The ACCC has today released draft determinations proposing to exempt the services provided by grain handler Viterra at its Port Adelaide Inner Harbour and Outer Harbor facilities from parts of the Port Terminal Access (Bulk Wheat) Code.

Viterra applied to be exempt from parts 3 to 6 of the code at all six of its South Australian port terminals; however, the ACCC’s draft determinations do not propose to exempt the company’s Port Lincoln, Wallaroo, Port Giles, and Thevenard facilities.

“Although Viterra is the dominant port service provider for South Australia’s bulk grain export market, we’ve formed the preliminary view that an increase in competition justifies a reduction in regulation at Inner Harbour and Outer Harbor,” ACCC Deputy Chair Mick Keogh said.

“The draft determinations for Inner Harbour and Outer Harbor were finely balanced but after looking at the South Australian grains market in detail, we were satisfied that Viterra’s Port Adelaide terminals face a level of competition from nearby third-party facilities, Port Adelaide’s containerised exports, as well as domestic grain markets.”

“We don’t believe that Viterra’s port terminal facilities around the Yorke Peninsula and Eyre Peninsula face sufficient competition to support exemptions at this time, though the ACCC will continue to closely monitor developments in the South Australian market,” Mr Keogh said.

Over the last six years, 68 per cent of all grain grown in South Australia, and 94 per cent of all bulk grain exports, have been exported through Viterra’s port terminal facilities.

If the ACCC grants a final exemption for Inner Harbour and Outer Harbor, the lower level of regulation will include Viterra no longer being subject to the code’s non-discrimination requirements and dispute resolution processes. The company will also not require ACCC approval of capacity allocation systems, and no longer be required to publish certain information about expected capacity or bulk grain stocks held at these port terminals.

Exempt service providers are still required to deal with exporters in good faith, publish a port loading statement and loading procedures, and make standard terms and reference prices available.

“The code exists to ensure that bulk wheat exporters have fair and transparent access to terminal facilities,” Mr Keogh said.

“Because the level of competition in port services varies significantly between regions, we take a balanced approach and are comfortable reducing regulation in places where multiple service providers are operating.”

“We rely on industry input to assist our decision making and given these are draft determinations, we welcome the views of stakeholders including growers, traders, exporters and infrastructure operators up until 3 November,” Mr Keogh said.

Submissions can be made at Viterra wheat port exemption assessment.

The ACCC will make its final determinations after submissions have been considered.

Background

The Port Terminal Access (Bulk Wheat) Code of Conduct commenced on 30 September 2014 and regulates port terminal service providers to ensure that exporters of bulk wheat have fair and transparent access to port terminal facilities.

The ACCC may determine a service provider to be an ‘exempt service provider’ at a specified port terminal. Exempt service providers are ‘exempted’ from having to comply with Parts 3 to 6 of the code in the course of providing services from the specified terminal.

In making its determination, the ACCC is required to have regard to the matters listed at subclause 5(3) of the code, which include: the interests of exporters and the service provider; whether the service provider is an exporter (or associated with an exporter); the presence of other exempt service providers in the area; and competition in upstream and downstream markets.

Obligations under Parts 3 to 6 of the code include not discriminating in favour of an associated exporter or hindering exporter access to terminal services, seeking ACCC approval for capacity allocation systems, resolving access disputes through prescribed processes, and publishing information about capacity and stocks.

Exempt port terminal service providers are only required to comply with the general obligations in Parts 1 and 2 of the code, which require port terminal service providers to deal with exporters in good faith and fulfil several reporting obligations.

The ACCC has recently exempted a number of South Australian service providers. More information about the code and exemptions is available at Wheat export projects.

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