Coles and Woolworths to end subsidised fuel discounts after ACCC steps in
The Australian Competition and Consumer Commission has brokered a climbdown from Coles and Woolworths requiring both to cease their practice of offering fuel discounts which were funded by other parts of their retail business.
The ACCC has stepped in to stop the practice
Both had offered up to 8 cents off a litre of fuel.
The ACCC had been conducting an investigation into the offers on the basis that they may have caused a substantial lessening of competition in markets for the retail sale of fuel.
“I welcome the voluntary cooperation of each of Coles and Woolworths in addressing our concerns, particularly as they each maintain that none of their fuel saving offers breaches the Act,” said chairman of the ACCC, Rod Sims.
“The ACCC’s investigation was nearing completion and although we had yet to make a decision in the matter, our investigation had caused us to consider the competition effects arising from the fuel saving offers.
“We had focused on the offers by the major supermarket chains of fuel discounts of 8 cents per litre, which were made for sustained periods during 2012 and 2013, and we were concerned that those offers could have longer-term effects on the structure of the retail fuel markets and also short term effects of increasing general pump prices in those markets.
“We’ve accepted the undertakings because they address the ACCC’s principal competition concerns and allow the matter to be resolved quickly and efficiently.”
The ACCC said that fuel retailers had complained that they simply could not afford to match the supermarkets’ fuel discounts of 8 cents or more, because those discounts were being funded from markets that were separate and unrelated to the fuel retailing markets.
Fuel Pump image via Shutterstock