Grain Express slows down

Brad ThompsonThe West Australian
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CBH is headed for another showdown with Australia's competition watchdog less than two years after losing a marathon battle to maintain a monopoly over WA's lucrative grain freight business.

The Australian Competition and Consumer Commission has launched a fresh investigation into CBH as the grower-controlled co-operative prepares to take delivery of the final grain from a harvest it expects to reach 14.5 million tonnes.

It is understood the probe relates to the operation of CBH's Grain Express division and allegations it is restricting competition in a deregulated industry where a raft of multinationals are fighting for market share.

Industry sources said the complaints about Grain Express centre on a seven-day opt-out clause for grain delivered to CBH sites in the Wheatbelt. Under the clause, growers have seven days to notify CBH that they do not want their grain transported by Grain Express.

It is also alleged that CBH is restricting competition by nominating some receival sites as Grain Express-only, which means growers have no choice but to use the transport service.

The Grain Express-only status is subject to change during harvest but the latest list comprises 30 sites.

Critics claim they are strategically selected and have included sites rival Bunge was likely to target to supply grain to its new port terminal at Bunbury.

CBH refused to comment, but its website says the sites are selected to ensure timely and efficient service.

The ACCC had cleared Grain Express to operate a system which forced growers using CBH storage facilities to also use its transport system after the deregulation of wheat export in 2008, but revoked the approval in 2011. The ACCC's then chairman Graeme Samuel said the monopoly insulated CBH from "any competitive pressure".

CBH chief executive Andy Crane blasted the decision, saying it was a victory for profit-hungry rivals looking to make money out of the grower supply chain. CBH's appeal was rejected in April last year.

Pastoralists and Graziers Association grains committee chairman John Snooke said the PGA had not instigated the latest ACCC inquiry, but supported any move to help growers reap maximum benefits from competition in the industry.

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