Could Cleanaway’s Citywide Buyout Threaten Melbourne’s Waste Competition?

ACCC’s Review of Cleanaway’s Acquisition

Cleanaway Waste Management Limited, one of Australia’s largest integrated waste management companies, has received a regulatory green light from the Australian Competition and Consumer Commission (ACCC) for its proposed acquisition of Citywide Waste. The ACCC’s investigation focused on whether the deal would reduce competition in the supply of putrescible waste collection and disposal services in Melbourne and surrounding regions.

Putrescible waste, which includes organic material capable of decomposition, requires specialized handling and disposal. Both Cleanaway and Citywide Waste operate key facilities in Melbourne, including transfer stations and landfills that serve commercial, industrial, and municipal customers.

Competition Concerns and ACCC’s Findings

The ACCC’s primary concern was the potential loss of competition between two nearby transfer stations: Cleanaway’s Melbourne Regional Landfill and Citywide’s Dynon Road transfer station. The Dynon Road facility is valued by some customers for its proximity to Melbourne’s central business district and ease of access for smaller waste collection trucks.

However, ACCC Commissioner Dr Philip Williams explained that larger customers typically have the flexibility to divert waste volumes to various landfills and transfer stations, including Cleanaway’s facilities. This ability to optimise collection and disposal routes means that competition remains robust despite the acquisition.

In addition, while some customers prefer the Dynon Road station due to its location, the ACCC found that the Melbourne Regional Landfill is a viable alternative for most, mitigating concerns about reduced customer choice.

Implications for the Waste Management Market

The ACCC concluded that the acquisition is unlikely to substantially lessen competition in Melbourne’s putrescible waste market. The regulator expects that the existing network of landfills and transfer stations will continue to compete vigorously for waste volumes, preserving competitive pricing and service quality.

For Cleanaway, the acquisition represents an opportunity to consolidate its position in Melbourne’s waste management sector without triggering regulatory hurdles. For competitors and customers, the decision signals that market dynamics are expected to remain stable, at least in the near term.

Looking ahead, the ACCC’s findings rest on current market conditions and customer preferences. Any shifts in these factors or in Cleanaway’s operational strategies post-acquisition could alter competitive outcomes, warranting ongoing scrutiny.