The Australian Competition and Consumer Commission will not oppose the proposed acquisition by Peregrine Corporation (Peregrine) of BP Australia's (BP) company- owned and operated retail petrol station sites in South Australia, after accepting a court-enforceable undertaking.
The undertaking requires Peregrine to divest four petrol stations in Adelaide to address the ACCC’s competition concerns associated with a concentration of Peregrine sites in particular local areas.
After consultation with a range of market participants and analysis of pricing data, the ACCC identified competition concerns associated with the acquisition of four BP sites in Adelaide - BP Elizabeth Vale, BP Mile End, BP Mitchell Park, and BP Westbourne Park.
Peregrine already operates a large number of petrol stations in the local markets around each of these four sites. These acquisitions would have given Peregrine an additional site in each of these local markets, and removed BP as a competitor.
The ACCC considered that there would be few effective competitors to Peregrine in the areas surrounding these sites if the proposed acquisition proceeded,” ACCC Commissioner Sarah Court said.
The ACCC was concerned that Peregrine’s acquisition of these sites could have resulted in higher fuel prices, or reduced non-price competition, at these sites or at other nearby Peregrine sites.
The undertaking requires Peregrine to divest itself of BP Elizabeth Vale, BP Mile End, and BP Westbourne Park. While Peregrine will retain BP Mitchell Park, the undertaking requires Peregrine to divest one of its existing nearby sites, On the Run South Plympton
In addition to considering the impact of the acquisition in particular local areas, the ACCC also considered the impact of the acquisition on Adelaide wide competition between petrol retail chains such as Peregrine, BP, Caltex, Caltex/Woolworths and Coles Express.
The ACCC noted that the acquisition would significantly increase Peregrine’s presence in Adelaide but concluded that this particular acquisition would not substantially lessen Adelaide wide competition between these chains.
“In reaching this conclusion, the ACCC noted pricing data suggesting that BP has not played a significant role in promoting vigorous price competition in Adelaide,” Ms Court said.
“However, Peregrine has an extensive network of sites in Adelaide and its share of the Adelaide market has increased significantly as a result of this acquisition and other recent acquisitions. Any further acquisitions by Peregrine of petrol stations in Adelaide would be reviewed carefully by the ACCC.”
The ACCC also announced today that it would oppose the proposed acquisition by Peregrine of Caltex Australia’s retail petrol station site in the Adelaide suburb of Fullarton. Peregrine had proposed to acquire this site from Caltex as part of the arrangements to address the competition concerns with its acquisition of sites from BP. The ACCC opposed the proposed acquisition of Caltex Fullarton because Caltex Fullarton appears to compete closely with BP Glenunga (which Peregrine will acquire from BP) and other nearby Peregrine petrol stations. The proposed acquisition would have eliminated this close competition.
Peregrine is a privately owned operator of South Australian retail service stations. Peregrine’s petrol sites operate under the ‘On The Run’ convenience store brand. Prior to this acquisition it operated 78 retail petrol stations in Adelaide.
BP is a vertically integrated refiner-marketer of petrol, diesel and automotive liquefied petroleum gas. As a result of the acquisition, BP will no longer have any company owned and operated retail petrol station sites in South Australia, although it will continue to supply fuel to BP branded independents on a wholesale basis.