AWB (ASX) rebels to challenge awb's monopoly

Rebels to challenge AWB's monopoly
Blair Speedy
December 10, 2005
MONOPOLY wheat exporter AWB has been thrown a new challenge by rebel West Australian farmers on the eve of a government-sponsored investigation into the company's payment of $300 million in kickbacks to Saddam Hussein.

West Australian grain handling co-operative CBH has applied to make bulk wheat exports to Asia, in defiance of the single-desk export monopoly operated by AWB.

The oil-for-food corruption scandal engulfing AWB has provided substantial ammunition to opponents of the single desk system.

WA growers in particular have complained that the single desk wipes out the competitive advantage they have over east coast growers, who are further away from key Asian export markets and therefore must pay more to ship their grain.

But because all wheat exports, except for small shipments carried in containers, are handled via the single desk, the cost of shipping is averaged out among all growers and deducted from sales revenue by AWB.

CBH chief executive Imre Mencshelyi yesterday said the group had applied to the Wheat Export Authority for a licence to ship 100,000 tonnes of wheat to the six flour mills it operates in Asia through joint venture subsidiary Interflour. Mr Mencshelyi said CBH would be able to pay growers an extra $10 per tonne for their wheat through supply chain efficiencies. However, he denied the application was an attack on the single-desk system.

But Leon Bradley, chairman of the Pastoralists and Graziers Association of WA, said the application would be a test of AWB's export subsidiary AWBI, which must be consulted by the Wheat Export Authority on all requests for bulk export licences. "We are about to see if AWBI is there to truly represent the interests of wheat growers, or if wheat growers exist merely to fit the plans of AWB."

Former Supreme Court judge Terry Cole will on Monday open an investigation into the role of Australian companies in the oil-for-food program, which a UN investigation found was used to corruptly funnel $1.5 billion to the Iraqi government under Saddam Hussein.

AWB has admitted paying millions in "transport fees" to Jordanian company Alia, a front for the Iraqi regime, but insists it thought the fees were for trucking the wheat around Iraq and had no knowledge the money was actually being used to prop up Saddam Hussein.

AWB has maintained the payments were approved by the Department of Foreign Affairs and Trade and the UN.

http://www.theaustralian.news.com.au/common/story_page/0,5744,17516624%255E643,00.html