SYDNEY, AUSTRALIA — The Australian Competition and Consumer Commission (ACCC) raised preliminary concerns about ANZ Terminals’ proposed acquisition of GrainCorp Liquid Terminals Australia Pty Ltd.
In early March, GrainCorp entered into an agreement to sell its Australian Bulk Liquid Terminals business to ANZ Terminals for approximately A$350 million. The Australian Bulk Liquid Terminals business was acquired by GrainCorp in 2012 as part of the acquisition of Gardner Smith. It operates eight liquid terminal sites across Australia.
ANZ Terminals and GrainCorp both provide port-side bulk liquid storage services in New South Wales, Victoria and South Australia, where they compete to store liquids including edible oils, tallow, non-flammable industrial chemicals and base oils for customers.
“Our preliminary view is that the acquisition will remove a significant competitor in what is an already concentrated industry in NSW, Victoria, and South Australia,” Rod Sims, ACCC chair said. “We are also considering the impact on competition in the east coast states more broadly, including Queensland.”
“In some locations, the acquisition will lead to ANZ Terminals becoming the only storage provider for some liquid products,” Sims said. “This loss of competition could result in higher prices for customers, or lower levels of service.”
The ACCC considers that there is limited vacant land available for lease by new storage providers at the ports, creating a key barrier to entry for potential new competitors.
“Even where land may be available, it is highly uncertain that any new entrants would emerge in the bulk liquids sector to challenge ANZ Terminals,” Sims said.
ANZ Terminals has provided a section 87B undertaking to divest the Osborne terminal in South Australia. The ACCC is still considering whether the undertaking will address the competition concerns in South Australia.
“The proposed undertaking does not address the preliminary concerns we have in New South Wales and Victoria,” Sims said.
The ACCC invites submissions from interested parties on the statement of issues by Aug. 8. The ACCC’s final decision is scheduled for Oct. 17.