On 5 June 2014, the ACCC released a Statement of Issues in relation to the proposed acquisition by Elgas Limited (Elgas) of Wesfarmers Kleenheat Gas Pty Ltd’s (Kleenheat) east coast LPG business.
Elgas and Kleenheat are major distributors of non-automotive LPG on the Australian east coast, with Origin Energy Limited being the only other major distributor. These three distributors have a combined east-coast share of approximately 90 per cent. In certain regional areas of Australia, the only distributors are Elgas and Kleenheat, or dealers supplied exclusively by them.
The ACCC’s preliminary view is that the proposed acquisition raises significant competition issues for the distribution of LPG to customers in a number of different markets. At a national level, the ACCC is concerned that the proposed acquisition would remove Kleenheat as the only competitor to Elgas and that this has the ability to distribute non-automotive LPG to large national customers on competitive terms.
Market inquiries also suggest that barriers to new entry and expansion by existing market participants are already high and would increase further as a result of the proposed acquisition.
Submissions in response to the Statement of Issues were due by 26 June 2014. The ACCC's final decision is expected on 24 July 2014.