ACCC approves rare anti-competitive order

  • Australia’s competition watchdog has approved a rare order allowing major freight and supermarket firms to work together.
  • The move comes after storms knocked out a major rail line connecting WA and the NT from the eastern states.
  • Linfox, Metcash, Coles, Woolworths and others are cleared to share information and prioritise urgent deliveries.
  • Visit Business Insider Australia’s homepage for more stories.

Australia’s competition watchdog has ruled some of the nation’s largest logistics and supermarket companies can temporarily cooperate to deliver vital goods in Western Australia and the Northern Territory, weeks after freak flooding damaged a major rail network connecting the west to the rest of the country.

In a rare decision, the Australian Competition and Consumer Commission (ACCC) on Wednesday granted an interim authorisation permitting major firms to share knowledge and resources to combat mounting supply shortages in WA and the NT.

The interim authorisation came just two days after freight giant Linfox asked to work with logistics firms Toll, Pacific National, One Rail, grocery distribution titan Metcash, and supermarket players Woolworths, Coles and ALDI, in order to prioritise deliveries.

Under the agreement, those firms and other parties which enter into the agreement, are allowed to fast-track the supply of vital goods by road, rail, sea or air. The interim authorisation also permits those parties to stockpile vital goods, if required.

The ACCC said that without their approval, such cooperation could breach Australian Competition Law — which the organisation is designed to uphold.

In late January, severe rainstorms in the South Australian outback damaged hundreds of kilometres of the Australian Rail Track Corporation (ARTC) rail corridor, the nation’s primary east-west rail connection.

Storm damage brought scheduled freight services to a halt, effectively severing the rail services connecting Adelaide, Perth and Darwin.

In early February, food distributors claimed perishable grocery shortages in Perth were worse than those caused solely by COVID-19 disruptions.

ARTC crews were unable to reach flooded sections for days after the storm, and worked round the clock once they reached the damaged tracks.

The rail corridor resumed operations on Wednesday, supplying Perth with long-awaited goods. The rail line’s reopening — and the interim authorisation — will also permit minerals essential for water purification to leave WA.

However, empty supermarket shelves may linger for a while longer. Speaking to Nine News, Pacific National director of corporate affairs Andrew Huckel indicated it could take four to six weeks for supplies to return to normal.

Those concerns played into the ACCC’s decision, according to the organisation’s deputy chair Mick Keogh.

The 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,” he said.

The decision will also minimise the risk of “critical shortages” caused by any potential rise of COVID-19 cases among transport workers, Keogh said.

While the ACCC found the benefits may outweigh the costs in the short term, the interim authorisation has its own shelf life.

The watchdog is taking industry submissions regarding the decision, with a draft determination to arrive in April.


Extracted from Business Insider

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