The ACCC has granted an urgent interim authorisation permitting the cooperation and sharing of information by companies in the supply chain to ensure critical retail goods, including food supplies, are able to reach consumer and businesses in Western Australia (WA) and the Northern Territory (NT).
The application follows storms and flooding in parts of South Australia which interrupted rail and road networks, limiting the supply of critical goods, including groceries, to WA and the NT. It is anticipated that it will take a number of weeks to clear the backlog of products caused by the supply chain disruptions.
"The ACCC's interim authorisation allows supply chain participants, such as the rail and freight handlers and trucking companies, to co-operate to address the destructive effects of the recent storm on the Trans-Australian railway and potential shortages of both retail and critical products in WA and the NT," ACCC Deputy Chair Mick Keogh said.
Without the Authorisation, such co-operation could constitute a breach of Australian Competition law.
The authorisation application was made by Linfox and applies to a number of other participants including Pacific National, One Rail and major grocery retailers. It also could apply to a broader range of participants including, retailers, wholesalers or other transport services suppliers who follow the notification procedure.
With the interim authorisation, the participants will be able to meet to identify which retail products are critically required in WA and NT and prioritise the supply by road, rail, sea or air freight into WA, including the developing of stockpiles if required. The interim authorisation also allows parties to work together to identify and ensure critical products from WA and the NT are supplied to other jurisdictions.
The authorised conduct applies to discussions and agreements made at meetings facilitated by government agencies and that the ACCC is invited to.
"There is a risk of critical shortages of retail products in WA being compounded by a possible rise of COVID-19 cases that might affect workers in the transport, logistics and retail industries," Mr Keogh said.
"Allowing this authorisation will likely result in public benefits by giving those in the supply chain the opportunity to maximise consumer access to retail groceries, reduce community concerns, and reduce strain on retail supply chains."
"This ACCC decision also helps limit critical shortages and supply chain issues elsewhere in Australia by granting interim authorisation to cooperate on ensuring exports can leave WA," Mr Keogh said.
"The interim authorisation does not extend to any agreements in relation to the price of any goods or services but allows the participants to commence co-operating immediately while the ACCC completes its full assessment."
"After receiving the applications for authorisation on Monday, we have worked very quickly to consider and approve this application," Mr Keogh said.
The ACCC will now seek feedback on the application for authorisation. More information, including the ACCC's Interim Authorisation Decision, is available at: https://www.accc.gov.au/public-registers/authorisations-and-notifications-registers/authorisations-register/linfox-australia-pty-ltd-on-behalf-of-itself-and-its-related-bodies-corporate
Background
On the weekend of 22 and 23 January 2022, significant heavy rainfall in north and west South Australia (SA) damaged 300km of the rail track between WA and SA and cut the rail link between WA, SA and the Eastern States of Australia. This storm damage to the Trans-Australian Railway has led to shortages of retail products in WA and the NT.
Approximately 80 per cent of WA's land-based freight from the rest of Australia arrives by rail. This includes retail products like fresh food, groceries, household products, personal hygiene products and pharmaceuticals. Critical products include telco equipment and equipment to repair transport vehicles.
The storm damage to the Trans-Australian Railway has also led to shortages, primarily in SA, but to a lesser extent in the Eastern States of Australia. Shortages include products which are mined or manufactured in WA or transported from WA and exported to the rest of Australia via the Trans-Australian Railway, such as aluminium sulphate which is used for municipal water purification and waste-water treatment.
Note
ACCC authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act (CCA).
The CCA allows the ACCC to grant interim authorisation when it considers it is appropriate. This allows the parties to engage in the proposed conduct while the ACCC is considering the merits of the substantive application.
The ACCC may review a decision on interim authorisation at any time, including in response to feedback raised following interim authorisation.
Broadly, the ACCC may grant an authorisation when it is satisfied that the likely public benefit from the conduct outweighs any likely public detriment.
