Coles Group Limited - variation - s.87B undertaking

On 6 December 2013 ACCC accepted a section 87B Undertaking from Coles Group Limited (ACN 004 089 936) (Coles Group), Coles Supermarkets Australia Pty Ltd (ACN 004 189 708) (Coles Supermarkets), and Eureka Operations Pty Ltd (ACN 104 811 216) (Eureka) (together Coles).

Pursuant to the Undertaking, Coles was required not make or allow fuel discounts where those discounts are:
(a)          not funded wholly by the fuel subsidiary or division of Coles;
(b)          greater in value than 4 cents per litre and, contingent on purchases of goods or services at a store or business separate from the retail fuel outlet.

On 15 April 2019 the ACCC accepted a variation to the section 87B Undertaking provided to the ACCC by Coles Group Limited, Coles Supermarkets Australia Pty Ltd, and Eureka Operations Pty Ltd (together Coles), previously accepted by the ACCC on 6 December 2013. The Undertaking related to fuel discounts offered to Coles’ supermarket customers, redeemable at Coles Express fuel sites.

Coles Express and Viva Energy restructured their alliance, so that as of 1 March 2019, Coles Express no longer retails fuel or sets the retail price of fuel. Coles Express continues to operate the site and the convenience store business however, Coles Express now acts as Viva Energy’s commission agent for the retail sale of fuel at Shell Coles Express sites. Fuel discounts will continue to be offered to Coles’ supermarket customers which are redeemable by purchasing fuel from Viva Energy at Shell Coles Express sites. The undertaking is being varied to reflect the new commercial arrangements.

The purpose of this variation to the Undertaking is to remove a provision of the Undertaking that prevents Coles from funding fuel discounts from any division outside Coles Express, given that Coles Express will no longer operate as a fuel retailer.

The variation will allow Coles to continue to offer fuel discounts that are linked to a consumer’s supermarket purchases, but it will retain a cap of 4 cents per litre on such discounts.