The Australian Competition and Consumer Commission (ACCC) is conducting an investigation into potential competition issues arising from Qube’s completed acquisition of the Newcastle Agri Terminal.
Qube notified the ACCC of the planned acquisition on September 8 and then completed the transaction on September 30.
The ACCC however claims it had made requests for the transaction to be delayed after competition concerns were raised by market participants.
In response to today’s announcement by the ACCC, a spokesperson for Qube said, “We are disappointed that the ACCC has chosen to continue with this inquiry.
“Qube advised the ACCC of the transaction in early September. Qube has also worked closely and constructively with the ACCC’s grain monitoring unit over a number of years. However, the commercial arrangements between the parties did not allow for any further delay in completion of the transaction.”
Qube Logistics owns and operates up-country grain storage sites at Narromine and Coonamble, and supplies rail haulage in NSW. It also owns and operates the Quattro bulk grain terminal in Port Kembla, NSW.
Newcastle Agri Terminal is a bulk grain terminal at the Port of Newcastle. The terminal is one of two bulk grain terminals located at the Port of Newcastle servicing export grain from farms and storage in northern NSW.
Qube describes the Newcastle Agri Terminal as a world class grain export facility. “The acquisition provides Qube with geographical diversity and enhanced service capability to service traders and grain exporters in the Newcastle market,” Qube said.
“The deal also provides an opportunity for Qube to invest in the terminal to deliver a larger and more efficient facility – providing customers in the Northern draw zone with a strong and independent competitive alternative to Graincorp’s terminal.”
The existing management team will continue to operate the Newcastle Agri Terminal.
Qube says its believes the transaction does not raise material competition issues however added that it will continue to provide every assistance to the ACCC to allow it to complete its inquiries.
As this investigation relates to a completed acquisition, it will be conducted on an enforcement basis.
“The ACCC was not provided with sufficient time or information to assess the competitive impact of the transaction. The potential competition concerns which have been raised relate to the vertically integrated position that Qube will now hold in the supply chain for delivery of bulk grain to the Port of Newcastle, and the potential for Qube to engage in anti-competitive bundling of storage, handling and transport with terminal services,” the ACCC said in a media statement.
ACCC chair Rod Sims added, “Our investigation will focus on the impact of the acquisition on the supply chain for bulk grain export through the Port of Newcastle, and the ability and incentive for Qube to discriminate against rivals.
“It is worrying when a major vertically integrated player pays $90 million for key infrastructure used for the export of agricultural products without first obtaining the ACCC’s view on whether the proposed acquisition is likely to have the effect of substantially lessening competition.
“By choosing to proceed before the ACCC had a chance to conduct its review, Qube and the former owners of the Newcastle Agri Terminal are exposed to potential legal action by the ACCC.”