Woolies Busted By Competition Watchdog After Breaking Promise On Fuel Discounts

The ACCC took both Coles and Woolworths to court over breaches to pledges to end excessive petrol discounts. Photo: Getty/ Greg Wood

Supermarket giant Woolworths has lost a Federal Court battle with the Australian Competition and Consumer Commission over offering an 8 cents per litre discount on petrol after pledging to stop excessive offers.

Late last year, the ACCC struck a deal with Coles and Woolworths to end a discount docket war that was as high as 30 cents per litre, capping the discount at 4c from the start of 2014.

The supermarkets are cross-subsidising the deals at the expense of rival petrol retailers.

But the Federal Court in Sydney did not see everything the ACCC’s way, dismissing claims that another bundled offer from Woolworths, as well as one from Coles, breached the deal.

The supermarket giants have switched tactics this year and now offer in an additional discount for petrol station purchases, which increasingly are designed as mini-supermarkets. Coles offered a 14-cent discount, but only 4 cents came from the supermarket side.

The Court found Woolworths breached the regulator’s court-enforceable undertaking on deals up to March 9 by offering a 4c petrol discount for spending $30 in supermarkets, combined with an additional 4c for spending $5 in its service stations.

But Woolworths escaped further sanction because from March 10, after the ACCC launched legal proceedings in February, it changed the offer so that the 4 cent station discount was available without a supermarket purchase, although it could also be used in conjunction with the supermarket offer for an 8-cent discount.

“The ACCC is pleased that the judgment also makes it clear that bundling of supermarket fuel offers greater than 4 cents in a single acquisition of fuel will not be permitted,” ACCC Chairman Rod Sims said.

“We are disappointed however that the Court has found that Coles and Woolworths can bundle a supermarket fuel offer with a petrol station offer. We will carefully consider the judgement and its implications for competition in fuel markets,” he said.

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