The Australian Competition and Consumer Commission (ACCC) has voiced its concern over the escalating state of shopper docket petrol discounting by the country’s major supermarket chains and its long-term impact on prices and competition.
ACCC chairman Rod Sims (below) said its concerns have intensified recently by the expanded use of shopper dockets and other discounts by Coles and Woolworths that have now reached discounts of up to 45 cents per litre.
“While large shopper docket discounts provide short-term benefits to some consumers, the likely harm to other fuel retailers and therefore to competition and the competitive process for petrol retailing could well be substantial,” Sims said.
“The ACCC believes this activity is likely to have a negative effect on competition in the petrol industry. Over time, higher petrol prices could be the result.”
He said it was difficult for unsubsidised fuel retailers to compete on a sustainable basis with discounts of eight cents per litre, let alone at levels almost six times that.
“If Coles and Woolworths wish to offer their customers a discount, it should be off supermarket products, not petrol,” Sims said.
He said the ACCC was nearing completion of its year-long investigation into shopper docket offers by the major supermarkets, and while admitting that the commission was powerless to ban shopper docket offers, it could work to force change in other ways.
“As an enforcement body … the ACCC can investigate market activity and, where appropriate, take court action seeking injunctions to stop the conduct and seeking penalties in appropriate cases,” Sims said.
The ACCC has the support of the country’s peak national motoring organisation, the Australia Automobile Association (AAA), which has joined the call for action to ensure that excessive shopper docket petrol discounting does not undermine competition.
AAA executive Andrew McKellar said motoring clubs have been raising concerns for some time with clear evidence that independent service stations are struggling to compete on price.
“Motorists are smarter than the supermarkets think they are and realise that excessive discounting is hurting competition,” McKellar said.
“Let’s not kid anyone, supermarkets are not offering fuel discounts as a measure of goodwill or charity, they will be making up the profit elsewhere in their business.
“Discounts of 40 cents per litre or more are unsustainable in the long term and will drive out retailers not linked to the supermarkets chains.”
McKellar called on the federal government to ensure the ACCC had adequate power to take action on the issue.
In a statement, Coles insisted its fuel discounts were purely designed to save Australians money.
“Fuel dockets reduce the cost of motoring for millions of Australians and, along with the $1 billion a year we are saving customers through lower grocery prices, they are helping hard-working families deal with the rising cost of living.”