$220 AWB fee under fire

24 Apr, 2002 10:00 PM

AWB Ltd has sparked outrage across rural WA after it charged wheat growers a $220 assignment fee for sourcing cheaper finance for quarterly pool payments from institutions other than AWB Finance.

Although AWB Ltd is legally entitled to charge the fee, as it is noted on AWB's quarterly payment contract, alternate finance providers and growers say they have been caught unaware.

NAB WA regional agribusiness manager John Boyle's gripe was that the bank was not formally made aware of the fee.

According to legal opinion, it is AWB's responsibility to communicate and inform growers to its fee structure, according to Mr Boyle.

Mr Boyle couldn't see why banks would be any different.

"If banks change a fee, growers are always informed," he said.

Mr Boyle said he was even unclear whether the $220 fee was a quarterly charge or one-off contract fee.

NAB has not ruled out going to the Australian Competition and Consumer Commission (ACCC).

Mr Boyle said NAB would talk to the other banks to discuss joint action.

Taking a stronger stance, the Pastoralists and Graziers Association this week declared they would seek ACCC action.

PGA Western Graingrowers chairman Leon Bradley said the fee was another blatant attempt to frustrate competitors who were offering grain growers a better service.

"It follows the AWB move last year of falsely claiming a 90 per cent underwriting when the real figure was about 80pc," Mr Bradley said.

The PGA also hit out at AWB's decision to mail funds to banks for client distribution when it used electronic transfers for its own grower clients.

"The result is that bank clients receive their AWB advances several days later than those dealing direct with AWB," Mr Bradley said.

He said the banks were attracting increasing growers support for their superior advance systems and this was obviously upsetting AWB.

The PGA supports a united front from the banks to take on AWB over this and other frustrations they have.

AWB Ltd has declared the $220 fee as an administration fee.

In its defence an AWB spokesman said it was a cost recovery mechanism.

"We incur costs when we deal with a third party," he said.

confirmed the fee was a one-off payment taken out of the first distribution.

The spokesman said details of the fee, which had been charged in the past, was noted on the national pool distribution terms and conditions available through the website and mailed to all growers who took the distribution option.

Although WAFarmers does not have the full details on the issue, WAFarmers grain section president Peter Wahlsten said if it was true, it was of concern.

"If true the lack of transparency in charging is concerning and people should have been made aware," Mr Wahlsten said.

"It concerns me, if it is true, because grower confidence and loyalty to the AWB is under some pressure in WA."

Mr Wahlsten pledged to raise the matter with AWB Ltd CEO Andrew Lindberg.



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