Australia's AWB Loses Wheat Export Veto for Six Months
Australia's monopoly wheat exporter, AWB Ltd., will lose its right to veto wheat export deals by its rivals for six months, Prime Minister John Howard said Tuesday.
Mr. Howard said the government would take control of the veto for six months, and would consult with the industry over the next three months before making a final decision on marketing arrangements for Australia's wheat.
"It is important that before we reach a final decision, we discuss the matter fully with the industry, and that is what we intend to do," Mr. Howard told reporters.
AWB's monopoly powers have been in the spotlight since a judicial inquiry found the company breached the United Nations oil-for-food program by paying $222 million in kickbacks to Saddam Hussein's Iraq between 1999 and 2003 to secure lucrative wheat sales.
Observers of Australia's wheat export system say that the veto power is the heart of the monopoly operation, known as the single desk, because it gives the holder the right to decide who will be allowed to proceed with exports.
Some farmers from the main wheat growing state of Western Australia have called for an end to the monopoly, following the inquiry by retired judge Terence Cole into the Iraq kickbacks.
They have the support of some government lawmakers, but the rural-based National Party, which governs in coalition with Howard's Liberal Party, supports the single-desk arrangements.
Mr. Howard emphasized the "Western Australian situation" in his statement and singled out that state's main grains group, Co-operative Bulk Handling, as one which would be involved in consultation with government in coming months.
AWB requested a halt to the trading of its shares on Tuesday so that it can assess the impact of the government decision. The stock was down 3.6% when trade was halted. Its chairman, Brendan Stewart, said last week that the veto power was an intrinsic part of the single desk.