Freight Rail

ACCC accepts CBH grain undertaking

An undertaking from WA grain handler CBH will ensure greater opportunities for the state’s growers and grain marketers to use alternative transport services to those offered by CBH, the competition watchdog has said.

The Australian Competition and Consumer Commission has accepted a court-enforceable undertaking from CBH to offer new services to growers and markets who use its storage and handling network.

These include a service that will allow marketers to buy grain delivered to a CBH receival site and arrange a transport provider other than CBH to transport the grain to port or domestic consumers.

The Group has committed to the ACCC that it will, for four harvest seasons starting in FY17, allow growers until February 1 after harvest to opt out of the full CBH integrated supply chain.

It said it will also “significantly reduce the number” of CBH receival sites where users can only use CBH’s surrounding infrastructure.

It also committed to certain price structures agreed to by the competition authority.

“The new services and the undertaking offered by CBH will facilitate increased competition between grain transport service providers to the benefit of grain growers and marketers and other participants in the WA grain supply chain,” ACCC chairman Rod Sims said.

CBH offered an integrated grain receival, transport and supply chain service known as Grain Express, between 2008 and 2016.

Following a ruling by the Australian Competition Tribunal, CBH in 2013 offered an unbundled grain supply chain service, known as Non Grain Express.

But the ACCC said the requirements of Non Grain Express were too difficult for growers, effectively forcing them to use CBH’s fully integrated service for most of their grain – a factor which raised competition concerns.

Sims says he’s convinced the new undertaking solves these issues.

“The ACCC welcomes CBH’s offer of this undertaking to resolve this matter without the need for court proceedings,” Sims said.