GrainCorp Limited - proposed acquisition of Cargill Australia Limited's bulk handling and storage facility in Gilgandra, New South Wales
Type of assessment
Cargill Australia Limited
Outcome of assessment
Total review days *
Commenced public review
17th August 2016
6th October 2016
The ACCC considered the likely effects of the proposed acquisition on the supply of upcountry grain storage and handling services in the Gilgandra/Dubbo region.
The ACCC concluded that the proposed acquisition was unlikely to substantially lessen competition in the supply of upcountry grain storage and handling services in the Gilgandra/Dubbo region.
The proposed acquisition would result in the removal of a key supplier of storage and handling services in the Gilgandra/Dubbo region. However, the combined GrainCorp/Cargill site in Gilgandra would continue to face competition from the remaining suppliers of upcountry storage and handling services in the region.
In addition to rival suppliers of storage and handling services in the region, the ACCC concluded that on-farm storage may be a viable alternative to commercial storage services in some cases for relevant grain growers but would not be a complete substitute for upcountry bulk storage and handling facilities.
The ACCC also considered whether the proposed acquisition would increase GrainCorp's ability and incentive to discriminate between grain growers in terms of price or service for storage and handling services. Based on market feedback, the ACCC concluded that this was unlikely. Relevant factors in this regard included:
- GrainCorp publishes a schedule of fixed storage and handling fees on the east coast, and
- GrainCorp would continue to have an incentive to deliver efficient services to growers, in order to maximise throughput in its facilities.