Consumers will continue to enjoy discounts on petrol bought using "shopper dockets" following an Australian Competition and Consumer Commission review of the schemes.
"The ACCC has conducted an extensive review of the tying of petrol discounts to grocery sales by both Coles Myer Ltd and Woolworths Limited", ACCC Chairman, Mr Graeme Samuel, said today. "It found that the introduction of the shopper docket schemes has encouraged competition and lower prices in the fuel market.
"The ACCC considers that there are substantial benefits for consumers from shopper docket discounts. These offers are pro-competitive because they drive competition between supermarkets and petrol retailers. In addition to the effect on price, retailers must become more innovative in non-price factors, such as additional services, to gain or maintain market share.
"In its investigations, the ACCC heard claims that the discount schemes would reduce the number of independents operating.
"However, the ACCC concluded that there were a number of factors that had seen the number of retail petrol outlets fall from 20,000 in 1970 to about 8,000 in 2003. This has also happened overseas.
"The new fuel standards, the trend to larger sites offering more pumps and other services at prime locations such as highways or major intersections and an anticipated shortfall of petrol in the Asia-Pacific region are expected to be continuing influences on the petrol market and as a consequence on site numbers.
"Some concerns were raised that, with fewer independents, the shopper docket discounts would entrench the dominance of the majors with long term effects on competition and prices.
"The ACCC considers that, in view of other developments affecting competitiveness in petrol and grocery retailing, the shopper docket discounts will be only a marginal determinant of whether independent retailers remain in these sectors. The ACCC also noted the United Kingdom experience where major supermarkets have been involved in petrol retailing for more than ten years and the discounting of petrol prices is still occurring".
In addition to the review of the shopper docket schemes, the ACCC also reviewed supermarket acquisitions by Coles.
"The ACCC notes that Coles in particular has been active in buying a number of independent supermarkets. The ACCC does not believe a substantial lessening of competition has occurred.
"However, the ACCC will continue to assess purchases of independent supermarkets by the major chains with a view to ensuring competition is not substantially lessened".
The ACCC also reviewed the short term arrangements between Woolworths and Caltex, which is itself a competitive response to the entry of Coles into petrol retailing, and found it was unlikely to result in a substantially lessening of competition in any relevant markets. At such time as any long term arrangement is agreed between the parties, the ACCC will need to consider that arrangement if it differs materially from the short-term arrangement.
"The ACCC must promote and protect the interests of Australian consumers, not preserve or protect certain sectors of business from fair, vigorous, lawful competition", Mr Samuel said.
The ACCC will continue to monitor, on a case-by-case basis, any complaints of unconscionable behaviour in either the grocery or petrol retailing sectors. This current review did not address matters of alleged unconscionable behaviour.
The ACCC has issued a report outlining its reasons for the decisions examining more broadly the evolution of the competitiveness of the grocery and petrol sectors. The report is available below.
The ACCC consulted with oil companies, independent petrol retailers, grocery retailers, industry bodies, lobby groups and consumer representatives in its inquiries.