The Australian Competition and Consumer Council (ACCC) has granted authorisation for an agreement between the Port of Brisbane and cruise operator Carnival to develop a new Aus$158 mill cruise terminal in Brisbane, subject to two conditions.
Under the agreement, Carnival will pay a fixed annual amount to the port for 15 years in return for preferential berthing rights at the new terminal. These include 100 ‘Foundation Berthing Days’ a year, giving Carnival first pick of 100 days at the terminal each year, up to a maximum of four days a week.
As part of its authorisation, the ACCC has imposed two conditions to reduce the agreement’s anti-competitive effect and to promote competition and choice for cruise customers.
“We recognise that the deal with Carnival helps to underwrite the projected $158 mill investment for the Port of Brisbane to build the new terminal,” ACCC Commissioner, Roger Featherston, said. “Brisbane has no dedicated ‘mega’ cruise ship terminal, and the construction of this terminal is expected to increase tourism and deliver a real benefit to the community and the Queensland economy.
“While we understand the important benefits a dedicated cruise ship terminal would bring to Brisbane, we have concerns that parts of the agreement between the Port of Brisbane and Carnival would limit consumer choice and entrench Carnival as the dominant cruise operator in Brisbane for 15 years. That’s why we have approved this agreement with two conditions,” Featherston explained.
Under the first condition, Carnival will still get a choice of four days each week, but cannot book more than two of the three ‘weekend’ days (Friday, Saturday and Sunday) in any given week, which are the most popular and profitable days.
“This means one of these premium weekend days will be available to competitors so other cruise operators can compete with Carnival in Brisbane. If no other operator books the third weekend day, Carnival will be allowed to use it,” Featherston said.
The second condition of authorisation is that if the terminal is expanded in the future to provide a second berth, Carnival cannot be given first right of refusal for an agreement, which would give it first choice of days at that berth.
“Our decision means that if a second berth is built, we should see improved competition between cruise lines,” Featherston added.
Carnival is currently the only cruise operator regularly running cruises out of Brisbane, but this could change over the next 15-18 years, the ACCC said.