Coles and Woolworths Still On Notice Despite Fuel Discount Agreement

MELBOURNE – Dec 5, 2013: VACC says Coles and Woolworths are still on notice, despite today’s voluntary agreement on supermarket fuel discounts. From 1 January, 2014, fuel discounts offered by Coles and Woolworths must not exceed 4 cents per litre and all fuel discounts must be funded from within their fuel retailing operations, including associated convenience stores and other activities at their service stations. The Australian Competition and Consumer Commission (ACCC) has accepted undertakings from the two supermarkets and now dropped its investigation into this issue.

VACC, on behalf of its independent service station owner members, has campaigned against supermarket fuel discounts since they were introduced. Recently, the size, frequency and duration of the supermarket fuel discounts has been excessive and impossible for small independent fuel retailers to compete with.

“Today Coles and Woolworths have agreed not to use their market power and dominance to unreasonably discount fuel or use their groceries to cross subsidise the fuel discounts,” VACC Executive Director, David Purchase, said.

“This agreement comes after considerable VACC pressure, through our members and our public awareness campaigns. We have argued for more Government intervention in cases were big business dominates small business and today’s announcement is a good example of how Government intervention, in this case, through the ACCC, can have a positive outcome.

“However, we do not see today’s news as the end of the issue. VACC will be watching Coles and Woolworths closely to ensure they adhere to the agreement and hope this will create a more open market in which independent fuel retailers can compete. If competition diminishes businesses will close and fail and competition will be reduced.

“We congratulate ACCC Chairman, Rod Sims, on his strong leadership on this matter and urge him to step in immediately if it looks like there is a breach of the agreement,” Mr Purchase said.