The Pastoralist and Graziers Association has welcomed the competition watchdog's proposal to remove Cooperative Bulk Handling's monopoly on transport from its 'up-country' storage facilities.
On Monday, the Australian Competition and Consumer Commission issued a draft notice proposing the revoking of CBH's notification which allows the company to require growers who store grain in its 'up-country' storage facilities to also use its transport services to move the grain to port for export.
CBH has about 4650 shareholders who grow grain and owns around 90 per cent of up-country storage facilities in WA.
It also owns and operates WA's four port export terminals.
"The ACCC considers that the notified conduct allows CBH to leverage its significant competitive advantage in supplying up-country receival, storage and handling services to foreclose any possibility of competition to supply transport services to customers who use its up-country storage facilities," ACCC chairman Graeme Samuel said on Monday.
Revoking the notification will allow grain growers who use CBH's up-country storage facilities to have choice in who they use to move their grain to port.
Western Graingrowers chairman Rick Wilson said, "Western Graingrowers, in a submission earlier this year to the ACCC, warned that CBH was using Grain Express to impede competitive investment and service delivery."
"Under the Grain Express system, there exists no incentive for supply chain costs to be driven down," he said.
"ACCC obviously saw through CBH's tactic to mount a fear-based campaign to prevent an objective review of the effectiveness of Grain Express in regard to the performance of the whole grain industry.
"Some of the advantages of deregulation have been lost through CBH's free-riding at the expense of grower.
"ACCC's decision will allow the bracing air of competition to begin to remedy this unfortunate loss," said Mr Wilson.
