SYDNEY, AUSTRALIA — The ACCC has decided it will not oppose ANZ Terminals Pty Ltd.’s proposed acquisition of GrainCorp Bulk Liquid Terminals.
The ACCC’s review focused on competition for the supply of port-side bulk liquid storage services in South Australia, Victoria and New South Wales, where ANZ Terminals and GrainCorp both provide storage of base oils, chemicals and edible oils/fats.
The decision not to oppose the acquisition follows ANZ Terminals providing a court-enforceable undertaking to divest its Osborne facility in South Australia to a purchaser to be approved by the ACCC. In addition, GrainCorp’s bulk liquid facility at Port Kembla has been excluded from the transaction and will remain part of GrainCorp.
“The divestment of the Osborne facility and exclusion of the Port Kembla facility alleviate our competition concerns in New South Wales and South Australia, as the competitive structure in these markets will be maintained,” said Stephen Ridgeway, ACCC Commissioner.
The transaction initially had raised significant competition concerns, particularly in NSW and South Australia, which are highly concentrated markets. The ACCC had published a statement of issues seeking further submissions from interested parties in July.
ANZ Terminals and GrainCorp also operate in Melbourne, where they are the two largest providers of non-fuel bulk liquid storage in the Port of Melbourne.
“Customer switching between ANZ Terminals and GrainCorp in Melbourne is quite limited because of the lack of available storage capacity for third parties,” Ridgeway said. “GrainCorp in particular reserves a significant portion of its capacity for its oils business. We found that a critical driver of competition was not incumbency, but the ability to expand and win contracts based on new tanks being built.”
The ACCC found that ANZ Terminals had no ability to expand easily on Coode Island at the Port of Melbourne while others had more options to expand.
The ACCC consequently accepted an obligation in the undertaking from ANZ Terminals that it will not lease any more of the limited land remaining at the Port of Melbourne’s Coode Island without receiving ACCC clearance to do so.
“This obligation will allow the ACCC to assess any future land acquisitions by ANZ Terminals on Coode Island,” Ridgeway said. “It will assist in ensuring that competitive tension from the threat of new tanks being built by competitors is likely to continue into the future.
“After a detailed examination and taking into consideration of the Melbourne remedy, we determined that, with the Melbourne remedy, a substantial lessening of competition is unlikely in Melbourne.”