July 10 - The Australian Competition and Consumer Commission (ACCC) has opposed the proposed acquisition by Sea Swift of Toll Marine Logistics' business in the Northern Territory and Far North Queensland.
The ACCC opposes the partnership of Sea Swift and the Toll Holdings division due to it being likely to substantially lessen competition.
"Sea Swift and Toll Marine are the two largest suppliers of marine freight services in the Northern Territory and Far North Queensland and, on many routes, are the only two suppliers of scheduled freight services. Over the last two years, they have been engaged in a price war with each other," said ACCC commissioner Roger Featherston.
"During this price war, Toll has agreed to sell its business to Sea Swift for a substantial amount of money, and a 20 percent shareholding in Sea Swift. Not only would this merger eliminate the competition between them, it would also increase the barriers to entry or expansion for other freight providers.
"The proposed transaction strengthens Sea Swift's position and power in these markets and denies other freight suppliers the opportunity of expanding as a consequence of any exit by Toll. As far as the ACCC is aware, Toll did not offer its business on the market or look for any other potential acquirer of the business or of any of the assets used in its business.
"As Sea Swift is the party with the most to gain from an end to the price war and Toll's exit from these markets, it is not surprising that Toll considered Sea Swift would pay the highest price for the business, but the ACCC has to consider the effects upon competition, not the commercial benefits to the party selling the assets."
The ACCC says it intends to issue a public competition assessment in due course.
Sea Swift provides scheduled freight shipping services, cruise and marine transport, project logistics and mothershipping services in northern Australia; while Toll Marine provides scheduled and charter shipping services, as well as oil and gas industry logistics services, in the Northern Territory and Far North Queensland, and has recently expanded its services into the Torres Strait where Sea Swift operates.