The Australian Competition and Consumer Commission will not oppose the proposed acquisition of the Northern Territory fuel retail and distribution assets from Octagon Pty Ltd by Ausfuel Holdings Pty Ltd, ACCC Chairman, Mr Graeme Samuel, announced today.
Ausfuel operates service stations in the greater Darwin region and a fuel distribution business which supplies fuel to industrial customers and service stations operated by third parties in the Northern Territory, Queensland and north-eastern Western Australia. Ausfuel is proposing to acquire the leaseholds in three service stations located in Darwin and fuel distribution assets from Octagon.
"The ACCC took into consideration Octagon's relatively limited involvement in fuel retail and distribution in the Northern Territory.
"Following market inquiries, it became apparent that post-acquisition Ausfuel will continue to be constrained by alternative fuel retailers in the NT and we consider the proposed acquisition is unlikely to substantially lessen competition in fuel retail and distribution markets.
"In relation to fuel distribution, the ACCC formed the view that the merged firm will be constrained by existing and potential new entrants since barriers to entry and expansion do not appear high. In particular our inquiries indicated existing competitors are willing and able to expand their operations to win customers from the merged firm should it attempt to raise its prices above competitive levels.
"These existing competitors, and the threat of new entry, are likely to act as a sufficient competitive constraint on the merged firm. As a result, the ACCC does not consider that the proposed acquisition will result in a substantial lessening of competition in the relevant fuel retail and distribution markets in the Northern Territory," Mr Samuel said.