29/07/2008 - 11:18

CBH Group hits back at AWB claims

29/07/2008 - 11:18

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Perth-based grain handler CBH Group has refuted AWB Ltd's claims to the corporate watchdog that its grain supply chain proposal will lessen competition.

CBH Group hits back at AWB claims

Perth-based grain handler CBH Group has refuted AWB Ltd's claims to the corporate watchdog that its grain supply chain proposal will lessen competition.

In a statement today, CBH said it was disappointed that AWB has chosen to ignore the interests of the state's grain growers and rural communities, as highlighted in its submission to the Australian Competition and Consumer Commission regarding the Grain Express proposal.

Grain Express is an industry initiative that aims to streamline the receival process, offer all growers full marketing options, improve transport utilisation and ensure continued investment in the transport network.

CBH chairman Neil Wandel said AWB offered no solution to the higher costs and logistical problems which otherwise will arise this season as the number of companies wanting to freight wheat from country receival points to port escalates from two to potentially 40 or more.

"AWB's submission effectively promotes the demise of the narrow gauge rail network in Western Australia," Mr Wandel said.

"The impact of this will see movement of the state's grain harvest take a dramatic shift from rail to road, with the tonnage increasing anywhere between 3.5 million tonnes to 7 million tonnes annually.

"Given this could mean that up to 80 per cent of WA's grain harvest is transported by road, this poses serious environmental and safety issues for local communities, local government and regional road users.

"Grain Express is the only viable proposal capable of being implemented before the coming harvest. The case for its introduction is compelling."

Mr Wandel said he was also disappointed in the misleading statements in AWB's submission, saying the factual basis of the submission is shaky and its main arguments are flawed.

"In particular, if you refer to paragraph 3.14 in AWB's submission, AWB incorrectly states that CBH is acting as the agent for the Australian Railroad Group (ARG)," he said.

"This is incorrect as CBH clearly states that it will contract with ARG to acquire freight services, use these services across the network and charge users of the system in accordance with the principles laid out in the Freight Fund."

Through bundling receival, storage and handling of grain with transport services, Grain Express delivers the only workable, affordable and flexible solution to the huge and urgent challenges facing the state's grain export supply chain as grain markets undergo deregulation.

Mr Wandel said growers have showed an overwhelming support for Grain Express, recognising it as a more efficient approach to managing the grain supply chain in a deregulated environment.

"Over the last two weeks we held the first round of 60 grower meetings which will be held across the state, and in discussing the new system with growers we've seen huge support for Grain Express and a lot of positive feedback," he said.

"The CBH Group is 100 per cent owned by Western Australian farmers and our interests are totally aligned with theirs and the businesses that want to serve them better.

"AWB has shown in the past that it's not in its culture to support WA growers.

"The CBH Group has made robust arrangements, both physically and in terms of its business operations to ensure its marketing subsidiary, Grain Pool, has no preferential access to the handling system or stock and quality information held by CBH Grain Operations.

"Fair and non-discriminatory access will be given to everyone who wants to export grain from WA."

The CBH Group, backed by independent economic analysis, totally refutes AWB's claim that Grain Express will lessen competition and states that the initiative is clearly in the public interest.

The ACCC is expected to make a ruling next month.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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