ACCC Takes Action Against Major Supermarkets
Wednesday 26 February 2014 @ 10.05 a.m. | Trade & Commerce
The Australian Competition and Consumer Commission (ACCC) has instituted actions in the Federal Court against Coles and Woolworths for breach of a court enforceable undertaking between the three parties in relation to their fuel shopper dockets.
On 6 December 2013, the ACCC and the two supermarket giants reached an agreement whereby the supermarkets would limit their fuel discounting to a maximum of 4 cents per litre from 1 January 2014 to prevent cross-subsidisation of their petrol businesses by their grocery sales. The ACCC explained that while the shift towards greater grocery loyalty discounts is a positive development, using this dominant position to give discounts in other markets was not. ACCC Chairman Rob Sims says that:
“whenever the discounts got much above 4 cents (per litre), particularly when they got to 8 cents and above, we noticed that the underlying price of petrol went up, so it was costing most people more for petrol even though those who had the discounts were benefitting…”
However, recent promotional offers by Woolworths and Coles have prompted the consumer watchdog to take action. The ACCC alleges that Woolworth’s current offer of a bundled discount of 8 cent per litre is a breach of its undertaking. Similarly, Cole’s current offers are view in the same light. The major supermarkets currently offer a 4 cent per litre discount if a store voucher of $30 or more is provided and a further discount is provided if convenience items are purchased to a set price at the petrol station.
“It is pleasing that Coles and Woolworths advise that they are honouring their undertakings to fund all fuel discounts from their fuel operations, but we are concerned that the bundled discount offerings in excess of 4 cents per litre are contrary to the terms of the undertakings.”
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