ACCC to work with Viterra to improve auction system for bulk wheat exports

Posted by AFN Staff Writers on 12th April 2012

The Australian Competition and Consumer Commission (ACCC) has announced that it will work with the wheat industry and Viterra, the port terminal operator, to improve arrangements for the export of bulk wheat in South Australia.

Viterra previously proposed an auction system to allocate port terminal capacity among competing exporters, as required under its access undertaking.

Access undertakings are intended to ensure that third party exporters are able to access the port terminals, ensuring fair competition in the market for the export of bulk wheat. The ACCC has a role in approving access undertakings for wheat exporters as part of the deregulation of the wheat industry.

The ACCC said it believes Viterra’s proposed auction system is too similar to that currently operating in Western Australia, despite additional measures including improved transparency and flexibility to move shipping slots.

Recent auctions in Western Australia have highlighted a number of problems with the operation of the system. Large volumes of capacity have not been allocated through auction, despite the record breaking crop harvested this season.

ACCC chairman Rod Sims said he is mindful that the industry is currently considering how to respond to these problems and that more time should be given before such an auction system is introduced into South Australia.

In issuing an auction objection notice, Mr Sims said, “The ACCC will work with Viterra and the industry to ensure that the best possible auction system can be introduced in SA for the benefit of the bulk wheat exporting industry and the wheat industry more broadly.

“Given the need for further industry consultation, this will involve extending the timelines set out in Viterra’s access undertaking without penalty to Viterra,” he added.

The ACCC accepted an access undertaking from Viterra on 28 September 2011. Part of this undertaking is an obligation to introduce an auction system for the primary allocation of port terminal capacity by May 2012.