ACCC to keep a close eye on Pacific National sale

<p>The Australian Competition and Consumer Commission will carefully assess the 50% sale of Pacific National and will not approve an acquisition potentially leading to the lessening of competition through &#8220benign neglect or the buy-in of a passive investor&#8221, ACCC chairman Graeme Samuel said yesterday (Wednesday, October 11).</p> <p>The divestment of a 50% stake in Pacific National was a requirement by the ACCC on the rail operator’s owner, Toll Holdings, for allowing its takeover of Patrick Holdings.</p> <p>&#8220The divestiture of Toll’s assets is not the end of the matter for the commission. Our goal is to increase competition and as such, the commission will carefully consider all prospective investors looking to take up those assets,&#8221 he said.</p> <p>&#8220For example, it won’t be good enough for investors to acquire a half interest in Pacific National if it intends to hand management responsibility to Toll.&#8221</p> <p>Toll’s general management undertakings required it not to discriminate in favour of Pacific National, Mr Samuel said, and required Toll to maintain an arm’s length approach to Pacific National’s management &#8211 that is, no access to Pacific National customer information.</p> <p>Mr Samuel said consultations with the market told the ACCC Toll’s commitment to divest 50% of Pacific National, along with other structural and behavioural undertakings, would reduce its ability to have any additional influence over the activities of Pacific National. </p> <p>&#8220The undertakings also paved the way for the entry into the non-bulk, east-west, rail line haul service, and provide additional safeguards, including non-discrimination clauses to prevent Pacific National &#8211 and Patrick &#8211 discriminating in favour of Toll,&#8221 he said.</p> <p>Mr Samuel broadly defined the ACCC’s underlying philosophy on the role of competition &#8211 activity resulting in more efficient, innovative and flexible firms, greater choice and lower prices for consumers, and a means of promoting community welfare. </p> <p>&#8220Markets that work in this way &#8211 that is, with the fundamental principals of competition &#8211 are our aim,&#8221 he said.</p> <p>&#8220But certain areas of the transport sector &#8211 such as ports and rail &#8211 have high barriers to entry, entrenched players, and national monopoly infrastructure. </p> <p>&#8220If left to its own devices, the industry would not be fair and competitive without regulation setting some of the rules.&#8221</p> <br />