ASX-listed Cleanaway, one of Australia’s largest waste management companies, has cleared a major regulatory hurdle on the path to its $110 million acquisition of Melbourne Council-owned Citywide Service Solutions.
The Australian Competition and Consumer Commission (ACCC) primarily examined the impact of Cleanway’s proposed acquisition of Citywide’s waste and recycling business on the supply of putrescible waste disposal services in Melbourne.
Putrescible waste is solid waste containing organic material capable of decomposing by microorganisms.
In Melbourne, Cleanaway provides collection and disposal services for commercial and industrial customers, as well as municipal councils.
Cleanaway operates one of the largest landfills in Melbourne, the Melbourne Regional Landfill in Ravenhall, and a network of transfer stations.
Citywide Waste also operates the Dynon Road transfer station, which accepts large volumes of putrescible waste and is close to the Melbourne CBD.
Transfer stations act as consolidation points where waste is dropped off by collection companies and bundled for bulk transport by trucks to final disposal sites. These sites can be landfills where waste may ultimately be buried.
Competition not stifled
“Our investigation looked at the central and west regions of Melbourne in particular because we were concerned about the loss of competition between Melbourne Regional Landfill and the nearby Dynon Road transfer station located in these regions,” ACCC commissioner Dr Philip Williams said.
“We reached two key conclusions from our investigation. First, those customers with larger waste collection trucks are able to optimise their waste collection routes to divert volumes to landfills and transfer stations other than the Melbourne Regional Landfill and Dynon Road transfer station.”
The competition watchdog added that with Cleanaway owning both facilities by way of its proposed acquisition, larger collection customers would still be able to take waste volumes to other competitors, if needed.
“Second, we found that while some customers preferred the Dynon Road transfer station due to its closeness to the Melbourne CBD and ease of access for smaller waste collection trucks, these customers don’t see Melbourne Regional Landfill as a viable alternative now,” Williams said.
“We therefore found that the acquisition is unlikely to have an impact on those customers.”
The ACCC expects rival landfills and transfer stations in Melbourne to continue to compete for waste volumes with Cleanaway after the acquisition.
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