THE AUSTRALIAN Competition and Consumer Commission has expressed concerns over the proposed sale of the Port of Geelong.
Spirit Super and Palisade Consortium have launched a joint $1.2 billion bid to buy the port, with Spirit Super to hold a 51 per cent stake and Palisade 49pc.
However, the ACCC has outlined potential competition concerns primarily around the fact Palisade manages investors that are the owners of western Victoria's only other bulk commodity port, the Port of Portland.
The port business, formally known as GeelongPort is currently owned by Brookfield Asset Management and State Super and was put on the market late last year.
It has attracted strong interest from the corporate sector due to some strong financial results in recent years.
The port is a big strategic asset as Victoria's second largest port and the sixth largest in the country.
In terms of grain exports, GrainCorp owns its own port facility at Geelong, Victoria's major grain export port, meaning there is technically two port operators in Geelong, but leases at the Port of Portland.
The proposed sale has raised potential alarms for the ACCC.
"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.
He said there was a lack of suitable alternatives to either Geelong or Portland for many exporters.
"For future large port users, there are very few bulk port options in Victoria," Mr Ridgeway said.
"Between them, the Port of Geelong and Port of Portland handle over half of Victoria's bulk cargo and this market structure is unlikely to change in the foreseeable future."
He said the ACCC had been contacted by market participants who were concerned about a lack of competition between Portland and Geelong should the sale go ahead.
"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," Mr Ridgeway said.
In the statement of issues released by the ACCC it was mentioned that port access rates are not regulated.
This has industry alert that rate increases could be increased in step across the two ports without exporters having a viable alternative.
"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 port is particularly important for bulk dry goods and 'break bulk' cargo, large materials, often used in construction such as timber, steel or wind farm equipment that is too big to be containerised.
The ACCC is asking for submissions into the implications of the proposed sale up until April 14.
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