THE Australian Competition and Consumer Commission (ACCC) has outlined preliminary competition concerns with the proposed acquisition of the Port of Geelong by the Spirit Super Palisade Consortium in a statement of issues published today.
The consortium includes a range of superannuation and infrastructure funds including the Diversified Infrastructure Fund managed by Palisade Investment Partners.
Investors managed by Palisade also wholly own and operate the Port of Portland, a bulk commodity port in south-west Victoria.
The proposed acquisition will therefore lead to minority common ownership between the Port of Geelong and Port of Portland.
“We are concerned the acquisition may substantially lessen competition in Victoria for the supply of port services for bulk cargo,” ACCC commissioner Stephen Ridgeway said.
“For future large port users, there are very few bulk port options in Victoria.
“Between them, the Port of Geelong and Port of Portland handle over half of Victoria’s bulk cargo.
“This market structure is unlikely to change in the foreseeable future.”
“It also appears that the two ports compete to attract certain dry bulk and break-bulk throughput, particularly from customers in western Victoria.”
Mr Ridgeway said some market participants have raised “strong concerns” with the ACCC about losing the benefit of competition between the ports of Portland and Geelong for the best prices and terms.
“Ports play a critical role in the movement of goods in Australia’s economy and there is some ability for major port users to choose between the Port of Geelong and Port of Portland when making very substantial infrastructure investments at the ports.
“Any substantial lessening of competition between ports therefore has the potential for significant negative impacts on a range of industries.”
The ACCC is exploring the degree of competition likely to be lost if the proposed acquisition proceeds.
“While the acquisition would not provide Palisade with outright control of Port of Geelong, it would obtain a degree of influence over the Port of Geelong.
“In addition, common ownership could lessen the incentives for the Port of Portland to compete for customers through existing facilities and future investments in infrastructure.”
The ACCC invites submissions from interested parties in response to the statement of issues by 14 April 2022.
The consortium includes Spirit Superannuation, Commonwealth Superannuation Corporation (CSC) and the Diversified Infrastructure Fund managed by Palisade Investment Partners, and proposes to acquire 100 per cent of the Port of Geelong, a freehold diversified bulk-commodity port.
Investors managed by Palisade also wholly own and operate the Port of Portland, a bulk-commodity port in south‑west Victoria.
Post‑acquisition, Palisade would manage a 100pc interest in the Port of Portland and a 49pc interest in the Port of Geelong.
The Port of Geelong is Victoria’s second largest port, and is currently owned 50pc each by a consortium comprised of Linx Cargo Care Pty Ltd and Infrastructure Investment Corporation (managed by Brookfield), and SAS Trustee Corporation.
The Port of Portland is a diversified bulk commodity, deep water port in south-west Victoria. It handles approximately 20pc of Victoria’s bulk freight. By road, the Port of Portland is 290km west of the Port of the Geelong.
Melbourne is the only other bulk grain port in Victoria.
Too much foreign ownership will extend the restrictions on Australian GDP and thus our exporters and profitability for those using imports such as fertiliser that has evolved over the last 60 years.
This sale should not be permitted