Australia

ACCC okays GrainCorp’s Cargill plant takeover

By RJ Whitehead

- Last updated on GMT

© iStock
© iStock

Related tags Australian competition and consumer commission v baxter healthcare

The Australian Competition and Consumer Commission has approved GrainCorp’s application to buy Cargill Australia’s 100,000-tonne bulk grain storage and handling facility in Gilgandra, New South Wales.

After compiling “extensive​” research from grain growers, traders, exporters and suppliers, ACCC chairman Rod Sims said “Growers and other market participants were not generally concerned about the proposed acquisition​.

Despite the transaction resulting in the removal of a close competitor to the existing GrainCorp site in Gilgandra, based on market feedback, the ACCC considered that there will be effective competition from other suppliers of storage and handling services in the region​.

On-farm grain storage is also increasing, but will not be a complete substitute for upcountry bulk storage and handling facilities​,” Sims added.

The ACCC said GrainCorp’s ability and incentive to discriminate between grain growers was also taken into account. This could be done by charging more or offering poorer service to growers that have fewer alternatives for storage and handling. 

Based upon market inquiries, the business watchdog said that it considered that discrimination between different growers was unlikely.

In forming this view, the ACCC noted that GrainCorp publishes a schedule of fixed storage and handling fees on the east coast. In addition, GrainCorp would continue to have an incentive to deliver efficient services to growers, in order to maximise throughput in its facilities​,” Sims said.

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