Waste management company Bingo Industries has offered to sell its Banksmeadow processing plant to ease ACCC competition concerns regarding its $578 million purchase of Dial-a-Dump.
The ACCC has proposed to allow product stewardship organisation AgStewardship to increase its levy on the sale of agricultural and veterinary (agvet) chemicals by participating manufacturers.
Funds raised from the levy are used in the drumMUSTER and ChemClear programs to collect and recycle agvet chemical containers and safely dispose of agvet chemicals.
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AgStewardship intends to increase the levy from four cents per litre of kilogram to six cents, to keep pace with increased expenses and to fund improvements to its programs.
This is the first increase in the levy since it began in 1998 and the ACCC is proposing to reauthorise the collection of the levy at the higher level for a further five years.
Over the lifespan of the programs, drumMUSTER has diverted more than 32 million containers from landfill and ChemClear has resulted in more than 661,000 litres of agvet chemicals being collected for safe disposal and recycling.
ACCC Commissioner Roger Featherston said the programs mean collection and recycling services are provided at no further cost to purchasers of agriculture and veterinary chemicals included in the scheme.
“As a result, many more containers and chemicals are returned and safely disposed of, which reduces the negative environmental, health and safety consequences of improper disposal, leading to better outcomes for farms and the environment,” Mr Featherston said.
Currently 116 manufacturers of agvet chemicals participate in the scheme, which AgStewardship estimates covers more than 90 per cent of Australian agvet chemical manufacturers.
“This is an impressive level of coverage, but if more manufacturers can be encouraged to participate in the scheme, then it should achieve even greater environmental and other public benefits,” Mr Featherston said.
The Australian Competition and Consumer Commission (ACCC) has authorised a group initiative of SA councils to jointly procure kerbside waste collection services.
The councils of Adelaide, Charles Sturt, Marion and Port Adelaide Enfield have been authorised to appoint a single provider for kerbside waste collection services.
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In the context of procuring waste services, councils may be considered to be each other’s competitors, which is why authorisation from the ACCC was required.
Broadly, the ACCC can grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any detriment.
Interim authorisation was granted on 20 July 2018, which allowed the councils to commence the tender processes. The tender closes on 12 December 2018 and will cover around 180,000 rateable properties.
According to the ACCC, it is common practice throughout Australia for local councils to jointly tender for waste services to reduce transaction costs, pool resources and expertise and achieve economies of scale. The ACCC has authorised 30 of these agreements so far, after concluding they were likely to benefit the public.
ACCC Commissioner Sarah Court said a joint tender process is likely to improve the four councils’ purchasing power and encourage more competition from suppliers than if each council conducted a separate tender process.
“It is common for groups of local councils to jointly procure waste services. The ACCC has authorised many such arrangements across Australia over the years,” she said.
“The joint tender process is likely to result in cost savings through encouraging more competitive bids, reducing transaction costs, and other efficiencies. These cost savings can be passed on to Adelaide residents in the form of lower costs or improved services,” Ms Court said.
The ACCC considered information both for and against the joint tender arrangement.
“Some suppliers raised concerns that the size of the proposed contract would deter some suppliers from tendering, resulting in a worse deal for ratepayers,” Ms Court said
“While there may be some companies that choose not to participate, the larger tender is also likely to attract additional bidders, and overall we consider most of the potential suppliers which would bid if the councils contracted separately are also likely to compete for the joint contract.”
“The councils have the experience and incentive to decide whether running a single tender process for a larger volume of work or four smaller, separate tenders, is likely to deliver the best outcomes for their respective communities.”
The ACCC also considered the longer-term impact of the joint tender on competition for waste collection services in Adelaide and found unsuccessful applicants will continue to have other opportunities to provide waste management services in other parts of the city.
The ACCC has announced that it will not oppose the proposed acquisition of Tox Free Solutions Ltd (Tox Free) (ASX: TOX) by Cleanaway Waste Management Limited (Cleanaway) (ASX: CWY).
It comes after Cleanaway agreed to acquire Tox Free Solutions (Toxfree) for about $671 million at the end of last year.
“This was a complex matter for the ACCC. We consulted extensively with over 70 interested parties including customers, competitors, regulators and industry bodies. There was a mix of views on the competitive impacts, with some expecting little change, and others highlighting concerns,” ACCC Commissioner Roger Featherston said.
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The ACCC’s investigation focused on waste streams and regions where the parties’ operations overlap, and the competitive implications of Cleanaway’s overall growth and increased vertical integration. Some of the key areas of focus were:
- Hazardous waste processing, particularly in NSW, Victoria, Queensland, SA and WA, and hazardous waste collection (including household hazardous waste collection)
- Non-hazardous liquid waste processing, particularly in NSW/ACT and Queensland
- Medical waste collection, particularly in Victoria, and medical waste processing,particularly in NSW, and
- Used lubricating oil collection, particularly in WA.
“Although there may be a lessening of competition in some waste streams, such as hazardous waste collection and processing, and used lubricating oil collection, we considered that, in this case, the proposed acquisition is unlikely to meet the threshold of a substantial lessening of competition,” Mr Featherston said.
“We concluded that the threat of customers switching to competitors would constrain Cleanaway from increasing prices or decreasing service levels to a significant extent in any waste stream or geographic area.”
“Competitors include major global waste companies such as Veolia, Suez and Remondis, as well as smaller local and regional operators,” Mr Featherston said.
The ACCC has noted the growing consolidation in the waste industry and any future merger or acquisition involving any large suppliers of waste management services will be closely investigated.
“Increased vertical integration, particularly between waste collection and waste processing, was also an issue raised by industry participants. We considered, however, that the increased vertical integration arising from this transaction would be unlikely to substantially lessen competition because of competitive constraints imposed by alternative suppliers.”