ACCC to conditionally approve Port of Brisbane and Carnival deal

2 March 2018 (Last Updated March 2nd, 2018 12:10)

The Australian Competition and Consumer Commission (ACCC) is proposing to conditionally approve a series of agreements that have been signed between the Port of Brisbane and Carnival Cruise Line, which relate to the development of a new A$158m ($100m) cruise terminal in Brisbane.

The Australian Competition and Consumer Commission (ACCC) is proposing to conditionally approve a series of agreements that have been signed between the Port of Brisbane and Carnival Cruise Line, which relate to the development of a new A$158m ($100m) cruise terminal in Brisbane.

The proposal forms part of a draft decision taken by ACCC regarding a corresponding agreement between the port and Carnival.

ACCC aims to impose a condition on its authorisation of the agreement via the proposal, citing competition concerns.

Carnival and the Port of Brisbane previously sought ACCC’s authorisation for the agreement, which intends to commit the cruise line to the planned terminal by ‘take or pay’ obligations.

"The ACCC recognises that, commercially, having a foundation customer helps to underwrite the projected A$158m ($100m) investment for the Port of Brisbane to build the new terminal."

Carnival will pay a fixed yearly amount to the port throughout the 15-year arrangement under the tentative agreement.

In return, the cruise line will obtain preferential berthing rights at the new terminal, including 100 ‘Foundation Berthing Days’ to allow the company to have first choice of 100 days per year at the facility, up to a maximum of four days a week.

ACCC commissioner Roger Featherston said: “A new dedicated cruise terminal in Brisbane, capable of berthing the increasingly popular ‘mega’ cruise ships, would be a real public benefit to the community, as this is infrastructure that is currently lacking in Brisbane.

“Of course, the ACCC recognises that, commercially, having a foundation customer helps to underwrite the projected A$158m ($100m) investment for the Port of Brisbane to build the new terminal.

“But we do have concerns about aspects of the agreement, particularly in relation to the four days a week Carnival is proposed to have preferential access to the terminal.

“This may limit or prevent competition from other cruise liners wishing to dock at the terminal in Brisbane during the peak summer cruising season.”

ACCC also expressed concerns that the terminal agreement could give Carnival a right of first refusal over a possible future second berth at the site.

The commission expects to make its final decision regarding the agreement in April.

ACCC previously revealed in November last year that it would not be granting interim authorisation to the Port of Brisbane and Carnival for their licence agreement associated with the Brisbane terminal.