Application for Interim and Final Authorisation143594.pdfPerth 14 October 2016 By email:...
Transcript of Application for Interim and Final Authorisation143594.pdfPerth 14 October 2016 By email:...
Our reference
ECS/JC/RACQ21489-9122057
3439-9654-0675v1
ONE ONE ONE Eagle Street 111 Eagle Street Brisbane QLD 4000
GPO Box 9925 Brisbane QLD 4001
Tel +61 7 3228 9333 Fax +61 7 3228 9444
www.corrs.com.au
Sydney
Melbourne
Brisbane
Perth
14 October 2016
By email: [email protected]
Mr Baethan Mullen
Acting General Manager
Adjudication Branch
Australian Competition & Consumer
Commission
GPO Box 3131
Canberra ACT 2601
Contact James Cameron (07) 3228 9752
Email: [email protected]
Partner Eddie Scuderi (07) 3228 9319
Email: [email protected]
Dear Mr Mullen
Application for Interim and Final Authorisation
We act for The Royal Automobile Club of Queensland Limited (RACQ) which proposes to
engage in a joint procurement of fuel supply services, automobile consumables, postage
services, courier services, freight services, printing services, publishing services and digital
services on behalf of itself and:
Royal Automobile Club of Victoria (RACV) Limited;
National Roads and Motorists' Association Limited;
The Royal Automobile Club of WA (Inc);
Royal Automobile Association of South Australia Incorporated; and
The Royal Automobile Club of Tasmania Limited,
(together, the Applicants).
The Applicants wish to apply for interim and final authorisation.
Application documentation
On behalf of the Applicants, we attach:
a completed Form B application for interim and final authorisation;
supporting letters of consent from each of the other Applicants authorising RACQ
to make the application on their behalf; and
proof of payment of the $7,500 application fee.
14 October 2016
Australian Competition and Consumer Commission
Application for Interim and Final Authorisation
3439-9654-0675v1 page 2
Further information
Please contact me if you have any queries or require further information.
Yours faithfully
Corrs Chambers Westgarth
Eddie Scuderi
Partner
FormBCommonwealth of Australia
Competition and Consumer Act 2010 - subsections 88 (lA) and (1)
AGREEMENTS AFFECTING COMPETITION OR INCORPORATINGRELATED CARTEL PROVISIONS: APPLICATION FOR
AUTHORISATIONTo the Australian Competition and Consumer Commission:Application is hereby made under subsection(s) 88 (1A)/88 (1) of the Competition andConsumer Act 2010 for an authorisation:
• to make a contract or arrangement, or arrive at an understanding, a provision of whichwould be, or might be, a cartel provision within the meaning of Division 1 of Part IVof that Act (other than a provision which would also be, or might also be, anexclusionary provision within the meaning of section 45 of that Act).
• to give effect to a provision of a contract, arrangement or understanding that is, ormay be, a cartel provision within the meaning of Division 1 of Part IV of that Act(other than a provision which is also, or may also be, an exclusionary provision withinthe meaning of section 45 of that Act).
• to make a contract or arrangement, or arrive at an understanding, a provision of whichwould have the purpose, or would or might have the effect, of substantially lesseningcompetition within the meaning of section 45 of that Act.
• to give effect to a provision of a contract, arrangement or understanding whichprovision has the purpose, or has or may have the effect, of substantially lesseningcompetition within the meaning of section 45 of that Act.
(Strike out whichever is not applicable)
PLEASE FOLLOW DIRECTIONS ON BACK OF THIS FORM
1. Applicant
(a) Name of applicant:(Refer to direction 2)The applicant is The Royal Automobile Club of Queensland Limited (RACQ)
RACQ makes this application on behalf of itself and on behalf of:
1. Royal Automobile Club of Victoria (RACV) Ltd (RACV);
2. National Roads and Motorists' Association Limited (NRMA);
3. The Royal Automobile Club of WA (Inc) (RACWA);
4. Royal Automobile Association of South Australia Incorporated (RAASA); and
3448-7194-1635v4 1
5. The Royal Automobile Club of Tasmania Limited (RACT),
and each of the related body corporates or group entities of RACQ and each of the
applicants listed above (together, the 'Applicants').
Attached to this Form B are letters from RACV, NRMA, RACWA, RAASA and RACT
authorising RACQ to make this application on their behalf.
(b) Short description of business carried on by applicant:(Refer to direction 3)
The business of RACQ primarily involves the provision to its members of:
• Roadside assistance services;
• Vehicle, home and contents insurance; and
• Finance and travel services.
(c) Address in Australia for service of documents on the applicant:
Eddie ScuderiPartner
Corrs Chamber WestgarthLevel 42, 111 Eagle StreetBrisbane QLD 4000
2_ Contract, arrangement or understanding
(a) Description of the contract, arrangement or understanding, whether proposed oractual, for which authorisation is sought:(Refer to direction 4)Please see attached supporting submission.
(b) Description of those provisions of the contract, arrangement or understandingdescribed at 2 (a) that are, or would or might be, cartel provisions, or that do, orwould or might, have the effect of substantially lessening competition:(Refer to direction 4)Please see attached supporting submission.
(c) Description of the goods or services to which the contract, arrangement orunderstanding (whether proposed or actual) relate:Please see attached supporting submission.
(d) The term for which authorisation of the contract, arrangement or understanding(whether proposed or actual) is being sought and grounds supporting this period ofauthorisation:
The proposed supply contracts between each of the Applicants (or related body corporates
of one or more of the Applicants) and the successful suppliers ot the Category 1, 2 and 3
goods and services will be for an initial term of up to 8 years with options to extend the
initial term of the contract for up to two additional 12 month periods.
3448-7194-1635v4 2
Authorisation is therefore sought for a 10 year period.
3. Parties to the proposed arrangement
(a) Names, addresses and descriptions of business carried on by other parties orproposed parties to the contract or proposed contract, arrangement orunderstanding:
Not able to be determined at time of filing application (other parties will be suppliers
responding to tenders issued on behalf of the Applicants).
(b) Names, addresses and descriptions of business carried on by parties and otherpersons on whose behalf this application is made:(Refer to direction 5)
The Applicants are member-owned automotive clubs and associations.
Each of the Applicants provides a range of goods and services, including roadside
assistance goods and services, vehicle, home and contents insurance, finance and travel
primarily to members resident within the jurisdiction in which they are established. The
goods and services provided by the Applicants may be provided by related body
corporates or other entities forming part of their respective corporate groups.
The addresses of each of the Applicants are:
The Royal Automobile Club of Queensland Limited
2649 Logan RoadEight Mile Plains QLD 4113
Royal Automobile Club of Victoria (RACV) Ltd550 Princes HighwayNoble Park North VIC 3174
National Roads and Motorists' Association Limited9A York StreetSydney NSW 2000
The Royal Automobile Club of WA (Inc)832 Wellington StreetWest Perth WA 6005
Royal Automobile Association of South Australia Incorporated
101 Richmond RoadMile End SA 5031
The Royal Automobile Club of Tasmania Limited
179 Murray StreetHobart TAS 7000
3448-7194-1635v4 3
4. Public benefit claims
(a) Arguments in support of authorisation:(Refer to direction 6)
Please see attached supporting submission.
(b) Facts and evidence relied upon in support of these claims:
Please see attached supporting submission.
5. Market definition
Provide a description of the market(s) in which the goods or services described at 2(c) are supplied or acquired and other affected markets including: significantsuppliers and acquirers; substitutes available for the relevant goods or services; anyrestriction on the supply or acquisition of the relevant goods or services (forexample geographic or legal restrictions):(Refer to direction 7)
Please see attached supporting submission.
6. Public detriments
(a) Detriments to the public resulting or likely to result from the authorisation, inparticular the likely effect of the contract, arrangement or understanding, on theprices of the goods or services described at 2 (c) and the prices of goods or servicesin other affected markets:(Refer to direction 8)
Please see attached supporting submission.
(b) Facts and evidence relevant to these detriments:
Not applicable.
7. Contract, arrangements or understandings in similar terms
This application for authorisation may also be expressed to be made in relation toother contracts, arrangements or understandings or proposed contracts,arrangements or understandings, that are or will be in similar terms to theabovementioned contract, arrangement or understanding.
(a) Is this application to be so expressed?
No.
(b) If so, the following information is to be furnished:
(i) description of any variations between the contract, arrangement U1" understandingfor which authorisation is sought and those contracts, arrangements orunderstandings that are stated to be in similar terms:(Refer to direction 9)
3448-7194-1635v4 4
Not applicable.
(ii) Where the parties to the similar term contract(s) are known - names, addressesand descriptions of business carried on by those other parties:
Not applicable.
(iii) Where the parties to the similar term contract(s) are not known - description ofthe class of business carried on by those possible parties:
Not applicable.
8. Joint Ventures
(a) Does this application deal with a matter relating to ajoint venture (See section 4J ofthe Competition and Consumer Act 2010)?
No.
(b) If so, are any other applications being made simultaneously with this application inrelation to that joint venture?
Not applicable.
(c) If so, by whom or on whose behalf are those other applications being made?
Not applicable.
9. Further information
(a) Name and address of person authorised by the applicant to provide additionalinformation in relation to this application:
Eddie ScuderiPartner
Corrs Chambers WestgarthLevel 42, 111 Eagle StreetBrisbane OLD 4000
Ion behalf of the applicant,.
(Signatu )
.~1;?)'?'..(..~ 0.~~~ .(Full Name)
'PAR.'Nt.R(Position in Organisation)
3448-7194-1635v4 5
DIRECTIONS
1. Use Form A if the contract, arrangement or understanding includes a provision which is,or might be, a cartel provision and which is also, or might also be, an exclusionaryprovision. Use Form B if the contract, arrangement or understanding includes a provisionwhich is, or might be, a cartel provision or a provision which would have the purpose, orwould or might have the effect, of substantially lessening competition. It may benecessary to use both forms for the same contract, arrangement or understanding.
In lodging this form, applicants must include all information, including supportingevidence, that they wish the Commission to take into account in assessing the applicationfor authorisation.
Where there is insufficient space on this form to furnish the required information, theinformation is to be shown on separate sheets, numbered consecutively and signed by oron behalf of the applicant.
2. Where the application is made by or on behalf of a corporation, the name of thecorporation is to be inserted in item 1 (a), not the name of the person signing theapplication and the application is to be signed by a person authorised by the corporationto do so.
3. Describe that part of the applicant's business relating to the subject matter of the contract,arrangement or understanding in respect of which the application is made.
4. Provide details of the contract, arrangement or understanding (whether proposed oractual) in respect of which the authorisation is sought. Provide details of those provisionsof the contract, arrangement or understanding that are, or would or might be, cartelprovisions. Provide details of those provisions of the contract, arrangement orunderstanding that do, or would or might, substantially lessen competition.
In providing these details:
(a) to the extent that any of the details have been reduced to writing, provide a truecopy of the writing; and
(b) to the extent that any of the details have not been reduced to writing, provide a fulland correct description ofthe particulars that have not been reduced to writing.
5. Where authorisation is sought on behalf of other parties provide details of each of thoseparties including names, addresses, descriptions of the business activities engaged inrelating to the subject matter of the authorisation, and evidence of the party's consent toauthorisation being sought on their behalf.
6. Provide details of those public benefits claimed to result or to be likely to result from theproposed contract, arrangement or understanding including quantification of thosebenefits where possible.
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7. Provide details of the market(s) likely to be effected by the contract, arrangement orunderstanding, in particular having regard to goods or services that may be substitutes forthe good or service that is the subject matter of the authorisation.
8. Provide details of the detriments to the public which may result from the proposedcontract, arrangement or understanding including quantification of those detrimentswhere possible.
9. Where the application is made also in respect of other contracts, arrangements orunderstandings, which are or will be in similar terms to the contract, arrangement orunderstanding referred to in item 2, furnish with the application details of the manner inwhich those contracts, arrangements or understandings vary in their terms from thecontract, arrangements or understanding referred to in item 2.
3448-7194-1635v4 7
3447-3772-3907v5
Attachment to Form B (supporting submission)
Commonwealth of Australia
Competition and Consumer Act 2010 — subsections 88 (1A) and (1)
AGREEMENTS AFFECTING COMPETITION OR INCORPORATING RELATED CARTEL PROVISIONS:
APPLICATION FOR AUTHORISATION
14 October 2016
The Royal Automobile Club of Queensland Limited
Royal Automobile Club of Victoria (RACV) Limited
National Roads and Motorists' Association Limited
The Royal Automobile Club of WA (Inc)
Royal Automobile Association of South Australia Incorporated
The Royal Automobile Club of Tasmania Limited
3447-3772-3907v5
1 Background
1.1 Relevant information about the Applicants
The Applicants and their respective related body corporates and group entities
are companies and associations operating in the automotive and motoring
services sector, many of which trace their history to automobile clubs formed in
the jurisdiction in which they operate.
Each of the Applicants provides a range of goods and services to their
subscribing members (generally, motorists and other consumers), including
roadside assistance, vehicle, home and contents insurance, finance and travel
services primarily to members resident within the jurisdiction in which they are
established.
Further details about the Applicants and the business conducted by each of
them is set out below:
RACQ
The Royal Automobile Club of Queensland Limited (the Company) is a
company limited by guarantee. The principal activities of RACQ include the
provision of motoring, insurance, membership and advocacy services.
RACV
Royal Automobile Club of Victoria (RACV) Ltd is a company limited by
guarantee. The principal activities of RACV are roadside assistance, social
club and resort operations, financial services, travel and tourism, advocacy,
home services and the provision and distribution of general insurance.
NRMA
The principal activities of the NRMA are the provision of a range of products
and services relating to the needs of its members. These include:
• roadside assistance services;
• accommodation and travel services;
• car and commercials vehicle rental services;
• motor vehicle servicing;
• emergency home assist;
• driver training;
• advocacy on a range of mobility issues including road safety, petrol
prices, vehicle safety and integrated transport solutions;
• the provision of the More4Members program;
• publication of a number of magazines, including the bi-monthly “Open
Road” magazine;
• a range of community service and education programs; and
3447-3772-3907v5 page 3
• investment of Members’ funds to support the principal activities.
RACWA
The RACWA is an Associated Incorporation registered in Western Australia.
The RACWA’s principle activities include:
• roadside assistance services;
• car, home, travel, life insurance;
• car and personal loans, investments;
• travel and tourism services;
• home security alarms and monitoring;
• car servicing and repairs; and
• advocating change on behalf of its members, including for better road
safety, sustainability and integrated transport solutions.
RAASA
The principal activity of the RAASA is the provision of motoring, insurance,
travel, finance and secure services to members.
RACT
The RACT is incorporated under the Corporations Act 2001 (Cth) as a
company limited by the guarantee of the members. The principal activities of
the RACT are to act as a roadside assistance provider, travel agent, general
insurance distributor and regional tourism operator.
Membership numbers of the Applicants
The approximate membership numbers of each of the Applicants is set out in
the table below:
Applicant Approximate member count as
at 30 June 2016
RACQ 1.6 million
RACV 2.1 million
NRMA 2.4 million
RACWA 870,000
RAASA 660,000
RACT 184,000
3447-3772-3907v5 page 4
1.2 Reasons for filing application
The Applicants consider that it is strongly arguable that the arrangements the
subject of this application do not constitute a contravention of the Competition and Consumer Act 2010 (Cth) (CCA) as none of the parties to the proposed
arrangement are in competition with one another for the acquisition of the
relevant products and services. Authorisation (including interim authorisation)
is sought to ensure that, if a different view were to prevail, the conduct would
be protected.
2 Description of contract, arrangement or understanding
2.1 Joint procurement of goods and services
The Applicants propose to jointly procure various categories of goods and
services.
In particular, the Applicants propose to jointly procure three categories of
goods and services as follows:
Category
Description of goods and services
Category 1 Fuel supply services: fuel for vehicles, including
but not limited to unleaded petrol, diesel, LPG and
any other automotive fuels; and
Automotive consumables: automotive
consumables, including but not limited to tyres,
oils, lubricants, fluids, batteries and any other
automotive spare parts and consumables.
These products will be predominantly used to
service the fleet of vehicles used by each of the
Applicants to provide services to their respective
members.
Category 2 Postage services domestic and international
postage services;
Courier services domestic and international
courier services; and
Freight services domestic and international
freight services.
These services will be acquired as inputs for the
member services provided by each of the
Applicants.
Category 3 Printing services: desktop printers and related
3447-3772-3907v5 page 5
consumables; external bulk printing services
including transactional correspondence in respect of
membership, roadside assistance, insurance and
claims, product disclosure statements (PDSs),
marketing materials and membership cards;
Publishing services: member magazines; journals;
PDSs, marketing materials, annual general meeting
and annual reports; and
Digital services: document composition services of
transactional correspondence and mail house and
email distribution.
These services will be acquired as inputs for the
member services provided by each of the
Applicants.
* The categories set out in this table have been applied for convenience only. No greater or lesser significance should be attached the good or services in one category over another.
Each of the Categories of goods and services described in the table above will
be acquired under separate procurement processes and supply contracts due
to the distinct nature of the Categories of goods and services.
2.2 Role of ‘Representatives Applicants’
Generally, the Applicants will agree for one of them
(Representative Applicant) to act on behalf of itself and all of the other
Applicants to procure particular goods and services within Category 1, 2 or 3.
For example, it is anticipated that:
(a) RACQ will be the Representative Applicant for the procurement of the
Category 1 goods and services;
(b) RACQ will be the Representative Applicant for the procurement of the
Category 2 goods and services; and
(c) RACV act on behalf of itself and the other Applicants to procure for
procurement of the Category 3 goods and services.
The Representative Applicant specified above may change, however the
Applicants are of the view that which of them initiates or leads a particular
procurement is not relevant for the purposes of assessing effects on
competition because each procurement will be conducted on behalf of some or
all of the Applicants.
In acting on behalf of themselves and the other Applicants, the role of the
applicable Representative Applicant will primarily involve:
(a) consulting with the other Applicants about the goods and services (within
Categories 1, 2 or 3, as applicable) to be procured;
3447-3772-3907v5 page 6
(b) preparing procurement documentation and contracts, such as request for
tender documents and goods and services supply contracts;
(c) releasing procurement documentation to the market;
(d) managing the procurement process, including the evaluation of tender
responses by the Applicants; and
(e) awarding supply contracts to successful suppliers.
2.3 Competitive procurement process
The Category 1, 2 and 3 goods and services will be procured by the Applicants
using competitive procurement processes.
Those procurement processes may be open (any supplier may respond to the
relevant tender) or closed (select suppliers are invited to respond to the
relevant tender).
The competitive procurement processes will be structured so that:
(a) the substantive terms and conditions of supply (including price) will be
agreed with each successful supplier on behalf of the Applicants; and
(b) each Applicant (or a related body corporate of the Applicant that is
nominated by the Applicant) will have a right, at the Applicant’s
discretion, to enter into a separate contract with a successful supplier of
Category 1, 2 or 3 goods or services on the terms agreed or specified
under the relevant procurement process and on any other specific terms
that may be agreed between the Applicant (or a related body corporate
of the Applicant that is nominated by the Applicant) and the successful
supplier (for example, to cater for operational, geographical or regulatory
differences between the Applicants).
2.4 Participation by Applicants is voluntary
Participation by each of the Applicants in the joint procurement processes for
particular Category 1, 2 or 3 goods and services will be voluntary.
If an Applicant decides not to participate in a particular procurement of goods
or services, it will not be prevented from acquiring or procuring those goods
and services independently of the other Applicants.
2.5 Urgent need for interim authorisation
The impending expiry of existing contracts between current suppliers of the
Category 1, 2 and 3 goods and services and some of the Applicants means that
the Applicants need to apply for urgent interim authorisation.
For example, the table below provides a sample of existing major contracts of
RACQ that are due to expire within four (4) to six (6) weeks of this submission.
Column A in the table represents the contract details, column B in the table
represents the contract benefit to one or more of the Applicants’ (RACQ’s 35
member-services including motoring, insurance, finance and travel services) 1.6
million plus members. If interim authorisation is not granted, the consequences of
waiting for final authorisation in 5-6 months’ time is indicated in column C.
3447-3772-3907v5 page 7
[Note: Table below contains confidential information and is redacted in the public
register version of this application.]
A – Applicant
Contracts (& expiry
date)
B – Benefits C - Consequence
Software license
Agreement No.2 (19-
Nov-16)
Member PolicyCtr,
BillingCtr and ClaimCtr
Increased costs (> CPI) and
software maintenance
reinstatement fees by
approx.. $320,0001
All Printers and Multi-
Functional Devices on
click rate agreements.
i) Sample 93 x RACQ
Multi-function device
contracts (25 x MFD
contracts expiring up to
22-Dec-16)
ii) 300+ Multi-function
device contracts
(various expiry dates)
Desktop printers and
related consumables;
correspondence in
respect of membership,
roadside assistance,
insurance and claims,
product disclosure
statements (PDSs),
marketing materials
and membership cards
Applicants continuing to
spend 30-40% above
market print costs:
(i) min. $12,000 per month
above market spend on
Applicants’ continued
impression costs or
>$72,0001 per six months
(overspend)
(ii) assuming similar rates
across all Applicant MFDs,
min. $40,000 per month
above market spend or
>$240,0001 per six months
(overspend)
1 (estimate of cost overruns that may arise if Applicant had to wait for final authorisation in 5-6
months’ time instead of having the benefit of interim authorisation – commercial in confidence).
RACQ also notes the considerable time that it takes to prepare, negotiate and
execute contracts and then take actions pursuant to those contract (for
example, acquiring resources and recruiting personnel).
Given the above, it is necessary for the Applicants to issue procurement
documentation for the Category 1, 2 and 3 goods and services as soon as
possible, ideally immediately after the period within which a decision on interim
authorisation would be made (which the Applicants understand to be a period of
28 days or less from the date of this application for authorisation).
Urgent interim authorisation is sought by the Applicants for the following conduct:
(a) discussions between the Applicants about the joint procurement of the
Category 1, 2 and 3 goods and services;
(b) the negotiation and entry into a contract, arrangement or understanding
between the Applicants that will govern the procurement process, including
the evaluation of tender responses by them;
3447-3772-3907v5 page 8
(c) the applicable Representative Applicant to prepare and issue the
procurement documentation for the Category 1, 2 or 3 (as applicable) goods
and services to the market on behalf of the Applicants;
(d) the evaluation by the Applicants of tender responses submitted by potential
suppliers of the goods and services; and
(e) the negotiation of supply terms between potential suppliers and the
applicable Representative Applicant on behalf of the Applicants.
The Applicants submit that a grant of interim authorisation will not have any
anticompetitive impact because:
(a) there will be no substantial lessening of competition in any market and
the market dynamics relevant to the supply of the goods and services will
not be affected by the preparation and issuing of procurement
documents for the proposed joint acquisitions; and
(b) no contracts for the supply of goods and services between each
Applicant (or related body corporate of an Applicant) and the successful
tenderer will become effective unless and until final authorisation is
granted by the ACCC (those contracts will be subject to a condition
precedent of final authorisation being granted by the ACCC).
RACQ was not able to make this application earlier because the Applicants did not
finally agree to jointly acquire the goods and services until 7 October 2016.
2.6 Final authorisation
Final authorisation is sought by the Applicants for:
(a) the conduct the subject of the request for interim authorisation in
section 2.5 (Urgent need for interim authorisation) above; and
(b) entry into, and giving effect to contracts for the supply of the relevant
goods and services between each successful supplier and each
Applicant or a related body corporate of the Applicant.
During any period between a grant of interim authorisation and a grant of final
authorisation, any existing contracts for goods or services similar to the subject
of this application would remain in place.
3 Public benefit claims
3.1 Material public benefits are likely to arise
The proposed arrangement between the Applicants is likely to result in material
public benefits (as further detailed in the headings of this section), including:
(a) efficiencies and transaction cost savings; and
(b) increased purchasing power leading to more competitive price and non-price
terms.
3.2 Efficiencies and transaction cost savings
Major contracting and procurement is a material cost for each of the Applicants.
3447-3772-3907v5 page 9
The Applicants primarily exist for the benefit of their respective members. Any cost
savings will benefit those members.
The joint procurement approach proposed between Applicants will, amongst other
benefits, deliver material transaction cost savings to each of the Applicants.
The Applicants have agreed to share relevant costs associated with the
preparation of the procurement documents. Any cost savings are likely to benefit
the members of each of the Applicants because such costs are ultimately costs
that are funded by fees charged to members.
The Applicants will also be able to combine their procurement resources rather
than each having to separately engage procurement specialists and legal advisors.
The joint procurement approach is also likely to reduce costs for suppliers who
invest time, effort and money in responding to tenders. Suppliers will only have to
prepare one tender response, rather than having to spend time and resources
responding to different tender documents issued by each of the Applicants at
different times.
The negotiation of the supply contracts with each of the Applicants will also be
based on template contracts issued with the procurement documents. This is likely
to create efficiencies in contract negotiation and administration for both the
Applicants and suppliers.
3.3 Increased purchasing power leading to lower costs
The Applicants will benefit from the economies of scale that would otherwise not be
achievable if each of the Applicants were to conduct their own procurement
process independently of each other.
This is likely to increase the level of competition between potential suppliers (both
in terms of price and non-price factors) wishing to submit tender responses to
provide the relevant goods or services.
4 Market definition The Applicants are buyers in markets where there are a very significant number of
other buyers for the acquisition of the relevant Category 1, 2 and 3 goods and
services. In addition, the volume of goods and services to be acquired by the
Applicants under the proposed joint acquisition are likely to represent a relatively
small proportion of the total volume of purchases in those relevant markets.
For the Category 1 goods and services, the Applicants consider that the relevant
market is:
(a) for fuel supply services, the national market for the acquisition and supply
of wholesale fuel supply goods and services; and
(b) for automotive consumables, the national market for the acquisition and
supply of wholesale automotive consumable goods and services.
For the Category 2 goods and services, the Applicants consider that the relevant
market is:
3447-3772-3907v5 page 10
(a) for postage services, the national market for the acquisition and supply of
domestic and international postage services;
(b) for courier services, the national market for the acquisition and supply of
domestic and international postage services; and
(c) for freight services, the national market for the acquisition and supply of
domestic and international freight services.
For the Category 3 goods and services, the Applicants consider that the relevant
market is:
(a) for printing services, the national market for the acquisition and supply of
commercial printing services;
(b) for publishing services, the national market for the acquisition and supply
of commercial publishing services; and
(c) for digital services, the national market for the supply of commercial digital
publishing and print services.
For completeness, the Applicants also ask the Commission to note that the
respective member services that each Applicant offers, and for which the
goods and services are being acquired, are substantially limited to the
jurisdiction in which the relevant Applicant is established.
5 Counter-factual If the proposed arrangement between the Applicants is not authorised, they will
have to acquire the Category 1, 2 and 3 goods and services independently of
each other using separate procurement processes.
It is more likely under this scenario that the Applicant’s would not be able to
negotiate supply terms as competitive as they would be able to negotiate if
they jointly procured the relevant goods and services.
6 Public detriments The Applicants submit that the proposed joint procurement arrangement between
them, and giving effect to the contracts awarded to successful suppliers, is unlikely
to result in any detriment to competition or the public interest, particularly given that
their combined purchase volume is a small proportion of the national markets
which operate for the acquisition and supply of the relevant products and services.
Participation in the joint acquisition process being proposed is voluntary.
If any detriment did arise, it is likely to be significantly outweighed by the range of
public benefits set out in this supporting submission.
Royal Automobile Club of Victoria (RACV) Limited ABN 44 004 060 833 racv.com.au
15th September 2016 Dear Nim Sathianathan, We refer to the proposed joint procurement of the Category 1, 2 and 3 goods and services by the RACQ, the RACV, the NRMA, the RACWA, the RAASA and the RACT (Applicants) described in the draft application for authorisation and supporting submission provided to us. The RACV consents to RACQ lodging the Form B application for authorisation and supporting submission with the ACCC on behalf of the RACV for the proposed conduct and arrangement. The RACV also consents to a copy of this letter being submitted by RACQ to the ACCC with the application for authorisation. Yours sincerely,
MELINDA RICH Executive General Manager – Corporate Services