Court finds Woolworths breached fuel shopper docket undertaking but later offers by Coles and Woolworths did not

14 April 2014

The Federal Court in Sydney has today found that Woolworths breached a court enforceable undertaking provided to the Australian Competition and Consumer Commission under section 87B of the Competition and Consumer Act 2010 by a 4 + 4 cents fuel discount offer made until 9 March 2014 that was conditional on Woolworths supermarket purchases.

However, the Federal Court dismissed the ACCC’s allegations against Coles and Woolworths that their recent offers of bundled discounts breached their undertakings to the ACCC.  

The ACCC had alleged that Woolworths’ initial 4 + 4 cents fuel discount offer was conditional on Woolworths supermarket purchases and breached its undertaking because the discount was only available to a customer who has made a qualifying supermarket purchase.  From 10 March 2014, after the proceedings had commenced, Woolworths introduced a new offer so that the 4 cent discount for purchases of $5 or more in the petrol station was available without a supermarket purchase, although it could also be used in conjunction with the 4 cent discount offer on qualifying fuel purchases.

The ACCC had alleged that Coles’ offer of a bundled discount of 14 cents per litre (10 + 4 cents) breached Coles’ undertaking to the ACCC.  As the discount of 14 cents per litre is only available to a customer who has made a qualifying supermarket purchase and because it exceeds 4 cents per litre, the ACCC alleged that this was a breach of Coles’ undertaking not to offer or allow a discount of more than 4 cents which is contingent on a qualifying supermarket purchase.  The Court dismissed the ACCC’s proceedings against Coles on the basis that only 4 cents of the total bundled discount of 14 cents per litre was contingent on a qualifying supermarket purchase.

ACCC Chairman Rod Sims said, “The ACCC welcomes the decision that offering a 4 + 4 cent fuel discount conditional on supermarket purchases breaches the undertaking to the ACCC.

“The ACCC is  pleased that the judgment also makes it clear that bundling of supermarket fuel offers greater than 4 cents  in a single acquisition of fuel will not be permitted,” said Mr Sims.

“We are disappointed however that the Court has found that Coles and Woolworths can bundle a supermarket fuel offer with a petrol station offer.  We will carefully consider the judgment and its implications for competition in fuel markets and any detrimental price impact on fuel consumers.  But it is significant that the undertakings continue to prevent Coles and Woolworths offering fuel discounts that are subsidised by their supermarket operations,” Mr Sims said.

The undertakings are available on the public register.

Release number: 
NR 86/14
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Media team - 1300 138 917