Aurizon to fight ACCC on sale

THE competition regulator has launched action in the Federal Court to block the sale of Aurizon’s freight business to a Linfox- Pacific National consortium, alleging the parties have engaged in anti- competitive behaviour.

The Australian Competition and Consumer Commission is also seeking penalties against them and an injunction to prevent Aurizon closing the business.

Meanwhile, Aurizon has “strongly” rejected the allegations and says it will vigorously defend them in court.

Aurizon announced plans in 2017 to sell its loss- making intermodal business, including the Acacia Ridge Terminal in Brisbane and the intermodal business which hauls general freight by rail and truck to regional Queensland centres including Townsville.

Grocers and hoteliers have warned if Aurizon closes the business, as it threatened to do if the ACCC blocked the sale, freight prices for delivery of goods such as beer and foodstuffs to remote centres could as much as double.

The ACCC has alleged Pacific National and Aurizon reached an understanding that would lead to Aurizon exiting its intermodal business through a combination of closure and transactions with Pacific National with the likely effect of lessening competition.

The regulator is seeking declarations, pecuniary penalties, orders restraining Pacific National from acquiring Aurizon’s assets and has applied for an injunction to prevent Aurizon from closing its Queensland intermodal business while the case is being determined.

ACCC chairman Rod Sims alleged another potential buyer capable of competing with Pacific National was available but that Aurizon chose a more “lucrative” option.

“At all times, Aurizon had alternatives to selling to Pacific National that would have been more competitive. The ACCC is aware of at least one alternative purchaser that is willing and able to acquire Aurizon’s entire remaining intermodal business,” Mr Sims said.

“However, the evidence makes it clear that it was more lucrative for Aurizon to agree to sell parts of its intermodal business to its closest competitor, and close other parts of that business, than it was to sell the whole intermodal business to a potential new entrant.”

Aurizon said it was disappointed with the decisions, and that it would “vigorously” defend the allegations.