The ACCC’s investigation focused on the import-export supply chain for containerised freight through the ports of Botany, Brisbane, Fremantle and Melbourne. Specifically, it closely considered the vertical integration of Asciano’s Patrick container terminals with Qube’s road and rail container transport services and empty container parks.

“The ACCC conducted extensive inquiries with a large number of industry participants. A broad range of issues were raised across different aspects of the supply chain. After careful consideration, the ACCC has concluded there is not likely to be a substantial lessening of competition in any market,” ACCC Chairman Rod Sims said today.

The ACCC expressed some competition concerns in a Statement of Issues it released in May, but the parties have since restructured the proposed acquisition so that ACFS will no longer be vertically aligned with Patrick.

“This restructure resolved a number of the ACCC’s concerns,” Mr Sims said.

“It means that the effect of the proposed acquisition is a substitution of Qube for ACFS as the downstream container logistics provider linked to Patrick.”

The ACCC also closely considered whether the vertical integration of the Patrick container terminal at Port Botany with Qube’s NSW rail operations would result in discrimination against Qube’s competitors. A key issue was whether this would reduce competition in the market for rail-based container transport services from regional NSW to Port Botany, with particular regard to Qube’s interest in the Moorebank intermodal terminal.

The ACCC conducted in-depth inquiries with a broad range of Port Botany stakeholders and identified several constraints on the ability and incentive of Patrick to discriminate in favour of Qube trains at Port Botany.

These constraints include the potential loss of business to rival stevedores, Brookfield and others having a 50 per cent interest in Patrick, and the regulation of rail services. The ACCC also considered the role of NSW Ports as the lessor of the Patrick Container Terminal site, particularly given it is also the landlord of intermodal terminals at Enfield and Cooks River. The ACCC considered NSW Ports has an incentive to limit any discrimination by Patrick Container Terminals in favour of Qube’s interests.

“The combined strength of these constraints has led us to conclude that the acquisition would not cause an increase in prices or a reduction in the quality of regional rail container export services to Port Botany,” Mr Sims said.

More information on the ACCC’s analysis of the relevant markets and associated competition issues that led to its decision is provided in the Public Competition Assessment, which is being published today on the public register: Consortium comprising Brookfield, Qube & Others - proposed acquisition of Asciano Limited

Background

A consortium comprising Brookfield, Qube, Global Infrastructure Management, LLC (on behalf of itself and its managed funds and clients), Canada Pension Plan Investment Board, CIC Capital Corporation, British Columbia Investment Management Corporation, GIC Private Limited and Qatar Investment Authority (the joint consortium) is seeking to acquire the shares and assets of Asciano.

The ACCC had earlier considered two separate proposals, one by a consortium led by Qube (Qube-led consortium) and another by a consortium led by Brookfield (Brookfield-led consortium). The ACCC’s consideration of those two earlier proposals ceased when the new joint proposal to acquire Asciano was announced.

Timeline

"We're continuing to see an increasing number of contacts from the Australian SME sector. These contacts have been particularly concerned about misleading conduct by other firms, consumer guarantees, and agricultural issues," ACCC Deputy Chairman Dr Michael Schaper said.

The ACCC's six-monthly Small Business In Focus report #12 has been released today, providing an update on key developments in the small business, franchising, and agriculture sectors.

For the first time, information on the agriculture sector has been included. The ACCC received more than 200 agriculture-related enquiries and complaints, principally focussed on potential misleading conduct or false representations made by other business operators.

Other key developments in the last six months are also highlighted in the report:

• there have been more than half a million visits to the ACCC's business web pages;
• the ACCC continues to receive reports of losses to scams targeting small businesses, with $1.6m lost;
• new rules for country of origin labelling have commenced (Country of origin food labelling laws);
• Coles, Woolworths, and Aldi are now required to comply with the entire Food and Grocery Code
• there were more than12,000 users of the ACCC's online education programs.

“The number of small businesses contacting the ACCC with concerns has risen steadily over the past few years. The current review of the Australian Consumer Law (ACL) provides a valuable opportunity for small business to speak up and ensure that their concerns are taken into account during that process,” Dr Schaper said.

“Concerns about changes to new credit card surcharging laws in September, and new changes to the ACL that will extend protections from unfair contract terms in business-to-business dealings in November are expected to generate significant interest from the Small Business community."

The ACCC has prepared advice for small business on the new credit card surcharging laws (Excessive payment surcharges) and new Unfair Contract Term protections (Business-to-business unfair contract terms).

Small Business in Focus is available at: Small business in focus - 1 January 2016 to 30 June 2016

The ACCC small business helpline is 1300 302 021.

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