Watchdog Barks At Coles, Woolies 'Discounts'

Written by Oonagh Reidy     29/07/2013 | 13:45 | Category: INDUSTRY

Competition watchdog has its eye on Coles and Woolworths

Watchdog Barks At Coles, Woolies 'Discounts'

Australian Competition and Consumer Commission Chairman, Rod Sims, today "expressed significant" concern about the 'escalating' shopper docket petrol discounts, and its effects on competition. 

The discounts offered by the retail giants to its supermarket  customers on petrol are now reaching 45 cents per litre in some cases. The ACCC believes it is likely to have a negative effect on the petrol industry. 

"Over time, higher petrol prices could be the result," Sims warned, noting the "the expanded use of shopper docket and other discounts by the supermarket giants."

"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," Mr Sims said.

The ACCC boss was speaking today at the Australian Institute of Company Directors' Leaders Edge Lunch in Melbourne.

"Even at the level of eight cents, it would be difficult to see how an unsubsidised fuel retailer could compete on a sustainable basis. Now, the discounts are substantially higher."

"If Coles and Woolworths wish to offer their customers a discount, it should be off supermarket products, not petrol," Sims said.

The ACCC has no power to ban shopper dockets offers, however, but can take court action seeking injunctions to stop the conduct and seeking penalties in appropriate cases, he warned. 

The watchdog has been investigating shopper docket offers by the major supermarkets since mid-2012. 

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