| | Media Release: Competition in the export grain supply chain | | |
(
25/03/2008) |
AWB today released an Allen Consulting Group report – Competition in the export grain supply chain – which will be an attachment to the company’s submission to the Senate inquiry into the draft legislation on the new wheat export marketing arrangements.
AWB Managing Director, Gordon Davis, said AWB commissioned a report by the Allen Consulting Group to provide independent analysis to ensure fair access to export wheat infrastructure for all traders and marketers under the proposed new arrangements.
“It is critical that the new arrangements don’t replace one national monopoly with three regional monopolies dominated by the bulk handling companies (BHCs),” Mr Davis said.
“The report states that new export wheat marketing arrangements must support genuine competition, with companies being given access to the infrastructure of the three dominant bulk handlers in Australia, CBH in Western Australia, and ABB and GrainCorp in the Eastern states.
“AWB is pleased with recent comments by BHCs that they would ensure fair access to their infrastructure, particularly port infrastructure, which is vital to ensure the export of Australian wheat remains competitive.
“However, the proof of these commitments will be what happens on the ground and a strong regulatory framework is required to ensure words equal action under the new arrangements.”
The report states:
Changes that the Government intends to implement in the marketing of export wheat are likely to lead to BHCs seeking to gain accreditation to become export wheat marketers.
The report reaches eight conclusions regarding the future arrangements to ensure fair access for all to export wheat infrastructure, including up-country storage and rail freight.
In light of the experience of other pro-competitive reforms, changes to the single desk should ideally also be accompanied by:
- the establishment of firm rights for third parties to access monopoly export wheat supply chain infrastructure, where such access is required for effective competition in upstream or downstream markets;
- measures to reduce the information advantages of the BHCs as wheat traders and other marketers; and
- solutions to minimise the incentives for the vertically integrated bulk handling companies to engage in non-price discrimination.
View the Allen Consulting Report (PDF 1,698 Kb)
Media Inquiries: Peter McBride, 03 9209 2174 or 0417 662 451