Australia’s competition watchdog, the Australian Competition and Consumer Commission, has set out a laundry list of competition worries about the proposed sale of the MIRRAT automotive terminal for AUD$$332.5m to Australian Amalgamated Terminals, a wholly-owned subsidiary of Qube (ASX:QUB).
MIRRAT operates the roll-on / roll-off facility at Webb Dock West in Melbourne. If the sale by current owner Wallenius Wilhelmsen to Qube goes ahead, then Qube would have sole operating rights for the ro-ro trade at Melbourne. Qube already operates automotive cargo terminals at Brisbane, Kembla, and a general cargo terminal at Appleton Dock in Melbourne.
“The proposed acquisition would result in Qube, which is one of Australia’s largest integrated terminal and freight logistics providers, owning a further interest in a critical component of the automotive delivery supply chain at the Port of Melbourne,” ACCC Commissioner Dr Philip Williams said. “We are concerned that the proposed acquisition may have a significant effect on competition in downstream services such as automotive stevedoring and pre-delivery inspection (PDI) services. If this transaction goes ahead, Qube would be operating the terminal while also being in active competition with other automotive stevedores or PDI providers,” Dr Williams said.
The ACCC added that that it is concerned that Qube could hike the costs of access for rivals by, for example, restricting access to the terminal or by lowering the quality of services. Concerns were also raised with the ACCC that Qube would have access to rivals’ commercially sensitive information.
Qube has proposed to the ACCC that it would accept an undertaking requiring AAT not to discriminate between terminal users in favour of its own interests, involve independent oversight, and impose restrictions on AAT’s ability to introduce or change certain tariffs.
Commenting in a stock market release, Qube welcomed the release by the ACCC, adding that AAT operates all of its terminals subject to ACCC oversight and has a strong history of compliance with the terms of the undertaking that operates across all three terminals.
“The ACCC’s decision to consult on the terms of the varied undertaking that AAT proposes will apply to its future operation of MIRAT is a welcome next step in the acquisition process. AAT is confident that this varied undertaking will address the concerns identified by the ACCC in its statement of issues and provide even stronger long-term protections for MIRRAT terminal users in the current arrangements,” Qube said in a release to the local stock market.
