Shopper docket undertakings

The ACCC has accepted s 87B undertakings from Coles and Woolworths to ‘cease making fuel saving offers which are wholly or partially funded by any part of their business other than their fuel retailing business’ and to ‘limit fuel discounts which are linked to supermarket purchase to a maximum of 4 cents per litre.’ The undertakings note (in part) that while ‘[Woolworths/Coles] does not accept that any of its fuel savings offers have adversely affected competition, [Woolworths/Coles] has voluntarily and without admissions offered to provide this Undertaking to address the matters raised by the ACCC’.The undertakings also contain a meeting competition exemption.

• ACCC press release
• Woolworths undertaking
• Coles Group undertaking

This has (rightly) attracted some criticism.  For example, the team at ‘The State of Competition‘ (Issue 15) refer to this as a ‘backdoor deal which has removed a clear benefit for Australian consumers’ and suggest that any such deal brokered by someone other than the ACCC would constitute a ‘straight-forward hub and spoke arrangement’.  Similarly, Blair Speedy over at the Australian believes ‘the ACCC’s decision to deny shoppers the opportunity to save a few dollars – and even at 45c a litre the savings on the average fill of 28 litres is just $12.60 – in the name of supposed competition seems bloody-minded at best.’ (Discount dockets no hurdle for rivals, 14 December 2013) and, more to the point, the Australian Financial Review points out that iIf the two big supermarket retailers had met secretly to jointly limit the amount of petrol discounts they offer shoppers, they could find themselves hauled before the courts for anti-competitive price fixing’ (Putting a brake on shopping competition, 11 December 2013, page 38) and notes that the ACCC has ‘not released evidence’ to back their claims that supermarkets are using market power to subsidise fuel discounts.  See also Simon Evans and Marianna Papadakis, ‘Seniors disadvantaged by fuel docket limit, says lobby group‘ (Australian Financial Review, 11 December 2013)