The Australian Competition and Consumer Commission said today it had blocked the takeover on the grounds that it would substantially lessen competition in remote regions in northern Australia, home to many disadvantaged communities.

“Sea Swift and Toll Marine are the two largest suppliers of marine freight services in the NT and far north Queensland and, on many routes, are the only two suppliers of scheduled freight services,” ACCC commissioner Roger Featherston said.

Customers and communities in these remote regions require regular replenishment of basic supplies and inputs, including fuel for electricity generators.

The communities are home to many disadvantaged consumers, often with very low incomes, Mr Featherston said. “Some of these communities cannot receive freight by road at all or in any significant volume.”

Over the last two years, the firms have engaged in a price war with each other, with Toll agreeing to sell its business to Sea Swift for $45 million and a 20 per cent shareholding in the group.

The watchdog said the takeover would strengthen Sea Swift’s position and market power, and would deny other freight suppliers the opportunity of expanding.

“Not only would this merger eliminate the competition between them, it would also increase the barriers to entry or expansion for other freight providers,” Mr Featherston said.

The ACCC said it was not aware if Toll offered its business on the market or looked for any other potential suitor.

“Sea Swift is the party with the most to gain from an end to the price war and Toll’s exit from these markets,” Mr Featherston said.