Farmers oppose ABB Grain plan

Viterra needs a 75% vote of shareholders in favour of the plan that has gained ABB management approval.
But South Australian Farmers Federation Grains Industry Committee (SAFF Grains) chairman Michael Schaefer has made plain grower opposition to the attempt by the Canadian company to take over what he described as an effective state monopoly trader and terminal operator in ABB Grain.
It was bad enough having massive control over the market centred in Adelaide but having that move to Canada would make the situation worse, Mr Schaefer said.
However, the betrothed companies have said that the Australian, New Zealand and south-east Asian operations of the new entity would be based in Adelaide, as would the global headquarters of its malt business.
But the operator of the state’s grain terminals should not be an agribusiness involved in the grain trade, Mr Schaefer insisted.
Growers had been very disappointed in the response from state and federal politicians, both in government and opposition, given that ABB had a “monopoly stranglehold on grain in this state in that they control all the information, they control the shipping stem, they control freight up-country, they control the malt houses and, more importantly, given it is an 80%-export state, they control all of the port storage and belts”.
SAFF would support independent national or international terminal operator control “so they had no vested interest in loading vessels before another operator”.
“Ultimately, the shareholders in ABB Grain will make the decision subject to review by [Australian Competition and Consumer Commission] and the Foreign Investment Review Board,” Mr Schaefer said
He added his concern that if Viterra also bought GrainCorp and CBH, it would control grain information nationally.
“We would urge all shareholders not to allow the removal of the current 15% cap on voting shares, until there are some fundamental changes in place.”
The changes SAFF Grains believed were required included:
• The sale of at least the port at Port Adelaide Outer Harbour;
• Information on flows stocks, sales, shipping and warehousing to be available to all;
• The need for an independent operator of the shipping stem;
• Effective monitoring of port pricing.
“These changes are required for real competition that can lead to efficiencies in the supply chain so that the whole industry operates in a streamlined and cost effective way with the benefits shared among all participants, particularly growers,” Mr Schaefer said.
Viterra chief executive Mayo Schmidt said that in Canada, where it controlled 60% of the ports, it had operated an open-access policy.
“We certainly would be open to any participant that wants to offer grain or other products to put through the facilities,” Mr Schmidt said on the ABC’s Inside Business program.
“These facilities work best when they are run at maximum volumes.
“That is how we operate in Canada – we handle grain for competitors, we handle grain for small companies.
“So, this is not a practice we are not used to.”
He refused to guarantee that poorly performing or “out of position” depots would survive under Viterra control and the company would “look at what makes the best access for growers, what allows them to be successful and operate efficiently”.
On industry consolidation, Mr Schmidt appeared to confirm Mr Schaefer’s concern, saying he believed ABB would be a “catalyst” for it.