Big discounts on petrol offered to shoppers by supermarket giants Coles and Woolworths may be damaging competition in the petrol market, the competition watchdog says.
The shopper docket discounts of up to 45 cents per litre could eliminate other petrol retailers and cause petrol prices to rise, Australian Competition and Consumer Commission (ACCC) chairman Rod Sims said on Monday.
While the watchdog can't ban shopper dockets, it can take legal action to stop anti-competitive market activity, he said.
"We're about protecting competitive processes," Mr Sims told reporters after addressing an Australian Institute of Company Directors lunch.
"If these shopper dockets continue at these levels, it's going to be very hard for other players to compete, and we may end up with two companies in the country selling petrol, which is not going to be in your (the consumers') interest."
If the retail giants want to offer large discounts, they should do so on groceries and food, he said.
The ACCC has been investigating shopper docket offers by the major supermarket chains since mid-2012, and expects to finalise its probe in the next few months.
Mr Sims said he became concerned when fuel discounts hit eight cents per litre, but of late the discounts have reached as much as 45 cents per litre.
The 45 cents per litre discount was not universal, and required a very large amount of groceries to be bought, or purchases of specific items, Mr Sims said.
Woolworths said its standard discount offer on petrol was four cents per litre, but it sometimes offered bigger savings depending on how much shoppers spent in its stores.
"Petrol is a significant part of the family budget, and many of our customers find these discounts helpful in managing their weekly expenses," Woolworths said in a statement.
The Australian Automobile Association (AAA) said discounts of 40 cents or more per litre were unsustainable and would drive out fuel retailers not linked to the supermarket chains.
AAA executive director Andrew McKellar called on the federal government to ensure that the ACCC had sufficient powers to act on Mr Sims' concerns.
"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," Mr McKellar said.
Share
