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Viterra Inc.: Viterra Provides Update on ACCC Process Related to ABB Grain

^{Published on 2009-08-05 20:20:21, Last Modified on 2009-08-05 20:20:31 - Market Wire}
 

CALGARY, ALBERTA--(Marketwire - Aug. 5, 2009) - Viterra Inc. (TSX:VT) acknowledges and references the announcement by the Australian Competition and Consumer Commission (ACCC) concerning the ACCC's draft decision on an access undertaking by ABB Grain Ltd. (ASX:ABB) in respect of its port facilities. On May 19, 2009, Viterra announced that they signed an implementation agreement under which they intend to acquire all the issued and outstanding shares in ABB Grain. The scheme booklet has been lodged with ASIC and is expected to be mailed to ABB shareholders during the first week of August.

ABB is an accredited bulk wheat exporter from Australia. Under relevant Australian law, parties must hold accreditation in order to export wheat in bulk from Australia. To maintain their accreditation, exporters like ABB that control port facilities, must also have in place from October 1, 2009, an ACCC-approved access undertaking that covers the services they provide at port terminal facilities. The accreditation covers wheat exports only and was established as a result of the de-regulation of the Australian wheat market in 2008.

ABB controls port facilities in South Australia and on April 16, 2009, submitted their access undertaking to the ACCC. Two other accredited wheat exporters that control port facilities also submitted undertakings. The announcement and draft decision by the ACCC referenced above relate to ABB's access undertaking. The ACCC made similar announcements and draft decisions in relation to the other accredited exporters' access undertakings.

The draft decision by the ACCC not to accept ABB's access undertaking in its present form was not unexpected by Viterra and ABB. The decision is a preliminary assessment of ABB's access undertaking.

- There is no precedent in Australia for formal access undertakings in respect of port terminal services for bulk agricultural commodities, and there are limited precedents for formal access undertakings in respect of access to essential facilities.

- When the Australian Government imposed the requirement (last year) that accredited wheat exporters have a formal access undertaking accepted by the ACCC, there was a relatively short period of time for preparation, review, public consultation and acceptance by the ACCC.

- ABB's submission pre-dates the public consultation process and as such any variation or replacement of its original access undertaking to address shortcomings identified by the ACCC will occur following today's preliminary decision.

- ABB has been in ongoing consultations with the ACCC and understands the ACCC's issues with the present form of its access undertaking.

ABB intends to consult further and work with the ACCC, and will submit a revised access undertaking to them. Viterra will support and work with ABB in addressing areas of concern and is confident that ABB will be able to reach a resolution through this process.

"In our view, the ACCC's decision is confirmation that the process that has been put in place will ultimately lead to arrangements that will ensure open and fair access for all potential users of the port terminals - something that will be of significant benefit to growers," said Fran Malecha Viterra's Chief Operating Officer. "The undertaking will be legally enforceable and will provide the most rigorous regulatory oversight that bulk handlers have operated under in Australia. We are confident that ABB will be able to address the ACCC's issues and concerns."

Viterra operates port terminals in Canada on the basis of open and fair access. Canadian port authorities are in place to provide oversight and to ensure the efficient use of port assets.

"We believe ABB has taken a responsible approach to port terminal access and we will support them and the ACCC as they work through the next phase in this process. Should ABB and Viterra combine, we are committed to open access to grain handling and export infrastructure in all markets. Driving efficiencies through the Australian supply chain can only come through open and transparent access to ABB port facilities, just as Viterra operates its Canadian supply chain" added Malecha.

Viterra Inc. is Canada's leading agribusiness, with extensive operations and distribution capabilities across Western Canada, and with operations in the United States, Japan, Singapore and Geneva. The Company is diversified into sales and services of crop inputs and equipment, grain handling and marketing, livestock feed, agri-food processing and financial products. These operations are complemented by value-added businesses and strategic alliances, which allow Viterra to leverage its pivotal position between Prairie farmers and destination customers. The Company's common shares are listed on the Toronto Stock Exchange under the symbol VT.