Proposed Joint Venture between Patrick Container Ports and Australian Container Freight Service to go ahead

June, 2015

By Danielle Barry, Lawyer

The Australian Competition and Consumer Commission (ACCC) will not oppose the proposed joint venture between Patrick Container Ports Pty Ltd (Patrick) and Australian Container Freight Service Pty Ltd (ACFS), a subsidiary of Asciano Limited.

Patrick and ACFS are competitors in the market of supplying wharf cartages, including warehousing and distribution services in Melbourne, Brisbane and Sydney, Port Botany and Fremantle.  The proposed joint venture will result in one of the largest providers of each service in Sydney, Melbourne, Brisbane and Fremantle.

The ACCC conducted a preliminary market investigation and considered the competitive effect of the proposal in the Sydney, Melbourne, Brisbane and Fremantle markets for:

The ACCC focused on whether:

  1. the proposed joint venture would result in an increase of price for customers for the provision of wharf cartage;
  2. the proposed joint venture would result in a decrease of services;
  3. the proposed joint venture would increase the ability/incentive of Asicano to foreclose the competitors’ access to the Patrick Terminals, which would result in the substantial lessening of competition in the provision of wharf cartages in the relevant ports;
  4. the proposed joint venture would disadvantage any market competitors; and
  5. there may be a market for integrated landside logistics incorporating wharf cartage as well as warehousing and distribution services.

Its decision not to oppose the joint venture on the basis of it being unlikely to lead to a substantial lessening of competition was based on:

  1. both parties supplying and having an interest in empty container parkers, including the supply of wharf cartage, warehousing and distribution services;
  2. the unlikelihood of Patrick Terminals’ were provided with an incentive to get involved in the joint venture because Patrick Terminals have already been vertically integrated prior to the joint venture;
  3. the lack of aggregation resulting from the proposed joint venture was not significant;
  4. the numerous competitors in the provision of wharf cartage in each metropolitan area; and
  5. the continuing of the large number of alternative providers with large scale operations capable of providing an effective constraint on the proposed joint venture.

Contact Mills Oakley

Mills Oakley has substantial experience in all aspects of Australian Consumer Law. If you would like more information on the above or would like assistance with the legal review of your proposed acquisitions, please contact us:

tim-cox

Tim Cox | Partner
T: +61 7 3228 0442
E: tcox@millsoakley.com.au

 

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