ACCC concerned about escalating shopper docket discounts

29 July 2013

Australian Competition and Consumer Commission Chairman Rod Sims today expressed significant and further concern about the escalating shopper docket petrol discounts, now reaching 45 cents per litre in some cases. Mr Sims addressed the Australian Institute of Company Directors’ Leaders Edge Lunch in Melbourne.

“The ACCC has previously signalled its concerns about the impact of shopper docket petrol discounts by Coles and Woolworths on the competitive process,” Mr Sims said.

“Our concerns have been intensified by the expanded use of shopper docket and other discounts by both Coles and Woolworths recently. These have varied in level of discount, frequency and duration, and have now reached up to 45 cents per litre.”

“While large shopper docket discounts provide short term benefits to some consumers, the likely harm to other fuel retailers and therefore to competition and the competitive process for petrol retailing could well be substantial,” Mr Sims said.

“Even at the level of eight cents, it would be difficult to see how an unsubsidised fuel retailer could compete on a sustainable basis. Now, the discounts are substantially higher.”

“If Coles and Woolworths wish to offer their customers a discount, it should be off supermarket products, not petrol,” Mr Sims said.

“The ACCC believes this activity is likely to have a negative effect on competition in the petrol industry. Over time, higher petrol prices could be the result."

"The ACCC is also investigating whether the duration, frequency and extent of these fuel offers may have an adverse impact on the underlying level of fuel prices, particularly in circumstances where fuel retailers who would otherwise compete for price conscious customers are unable to do so."

“The ACCC has no power to ban shopper dockets offers. As an enforcement body, however, the ACCC can investigate market activity and, where appropriate, take court action seeking injunctions to stop the conduct and seeking penalties in appropriate cases.”

“The ACCC has been investigating shopper docket offers by the major supermarkets since mid-2012. Our investigation is nearing completion and will be finalised in the next few months," Mr Sims said.

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