ACCC reaches out to water brokers

ACCC to fully test water market rumours

Water
ACCC INQUIRY: ACCC staffers Megan Utter and Gwen De Boe addressed the Australian Water Brokers Association (AWBA) annual general meeting in Melbourne this week.

ACCC INQUIRY: ACCC staffers Megan Utter and Gwen De Boe addressed the Australian Water Brokers Association (AWBA) annual general meeting in Melbourne this week.

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ACCC wants to hear from brokers about the water market.

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The Australian Competition and Consumer Commission has promised its investigators will fully test the authenticity of some of the rumours surrounding the operation of the water market.

ACCC staffers Megan Utter and Gwen De Boe addressed the Australian Water Brokers Association (AWBA) annual general meeting in Melbourne this week.

The ACCC is currently conducting an inquiry into water trading and the water marketplace.

Read more: ACCC water trade inquiry calls for farmer, trader submissions

Ms Utter said the ACCC would take an "evidence-based approach" to understanding and analysing the issues of concern over the functioning of the market.

She told AWBA members it was quite troubling some people were not taking the time to find out how the market worked, rather believing many of the rumors surrounding it.

"And they don't really have any great interest in expending much time and energy in looking for the information sources, or getting to the bottom of this," Ms Utter said.

"Its a challenge that I don't know there is an answer to.

"But I'm interested in how we actually communicate our findings, how do we give people the information, we uncover, that hopefully encourages confidence in the market?"

Difficult task

She said the inquiry was going to face the difficult task of trying to pull together many disparate threads, over a number of levels of governments.

"We will seek to recommend options to achieve beneficial outcomes, we are going to be guided by the submissions that identify the areas of greatest concern, to people," she said.

'We will also seeking to take a fresh view, as to how we can recommend options that might build some momentum, behind the case for actions."

She said many would be aware those options had been put before, but it was time to build a case for "investment in infrastructure to support this burgeoning market."

And Ms De Boe said the ACCC wanted to hear from brokers, as they knew a lot about what was going on.

"You are one of the key users groups, relying on price information to inform clients," Ms De Boe said.

"It's really important you don't just throw anecdotal things in there.

'If you can back that up with evidence that we can assess and investigate and that's really useful for us."

Market concerns

She said from time to time the ACCC heard different concerns about water brokers and exchanges (Water Market Intermediaries).

"We hear about things through formal complaints made to us, when we have done consultations in the past and we are already hearing various allegations, being raised in public forums," she said.

"We will be investigating the authenticity and materiality of these things

"We are not taking people's claims at face value - it's part of our job, to assess whether these claims have any merit."

She said some of the concerns that had been raised were conflicts of interest - whether real or perceived, lack of transparency about broker conduct and advertising parcels of water in different settings.

The ACCC was trying to understand the pros and cons of advertising water for sale on more than one platform.

"We know a lot of market participants are already feeling it's difficult to get information, and so they might like to advertise with multiple brokers, to feel they are getting the best price, for them," Ms De Boe said..

"If we were to restrict that and say, absolutely no parcel can be advertised twice, we need to be careful of understanding the consequences of doing that and is it actually providing better outcomes for market participants, or not.

"This is not a foregone conclusion, I am happy to be convinced, either way."

While there was a lot of talk about speculators, the ACCC also knew there were market forces at work.

"We know there are underlying supply and demand factors, at play," she said.

"We also know the market infrastructure, the architecture of when can you trade, how you can trade, does affect who trades, where, when and how much.

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