THE Australian Competition and Consumer Commission (ACCC) has approved Viterra's proposal to introduce long-term agreements (LTAs) to allocate port capacity at its six South Australian bulk wheat ports.
“The ACCC considers that Viterra’s proposal, submitted in November, substantially addresses concerns raised in the ACCC’s draft assessment to not approve Viterra’s June proposal,” ACCC Commissioner Cristina Cifuentes said.
Key amendments of the November proposal included a mechanism for the ACCC to review the initial long term capacity allocation process and a reduction of the initial term of the LTAs from five to three years.
“These amendments, together with other features and safeguards in the proposal, strengthen the negotiating position of the smaller and medium sized exporters and represent an outcome that is expected to better facilitate effective competition in the South Australian bulk wheat export industry,” Commissioner Cifuentes said.
This decision means that Viterra’s current auction system for allocating port capacity will be replaced by a negotiation based framework using LTAs as the primary allocation method from 2016-17.
The current first-in-first-served (FIFS) process will be carried over, with some modifications, to allocate a reserved amount of short term capacity on an annual basis.
Viterra formally lodged an initial proposal in March 2015 and made subsequent revisions in June, September, and November.
Under the Port Terminal Access (Bulk Wheat) Code of Conduct (the Code), the ACCC has a role in approving capacity allocation systems used by port terminal service provider’s to allocate port capacity.