ACCC takes Coles and Woolies to Court Over Fuel Discounts

February 28, 2014 Updated: February 28, 2014

The competition watchdog has begun proceedings in the Federal Court against Coles and Woolworths for allegedly breaching an agreement to limit fuel discounts in their shopper docket schemes.

In December, the supermarket giants made a court enforceable undertaking with the Australian Competition and Consumer Commission (ACCC) to voluntarily limit their fuel discounts to a maximum of 4 cents per litre.

However, the ACCC alleges both retailers are still offering larger discounts to customers who make purchases at their petrol stations.

ACCC chairman Rod Sims says the discounts offered exclusively to Coles and Woolworths customers could drive up general pump prices and affect the structure of the market.

“Following an extensive investigation, the ACCC had been concerned that fuel savings offers could have longer-term effects on the structure of the retail fuel markets and also short term effects of increasing general pump prices in those markets,” ACCC chairman Rod Sims said.

At Woolworths supermarkets, customers who purchase $30 of groceries qualify for the 4 cents per litre discount, and can receive an additional 4 cents per litre discount by purchasing $5 worth of convenience items at a Woolworths petrol station. The ACCC says that Woolworth’s scheme breaches the undertaking, as the discount is only available to a customer who has made a qualifying purchase at their supermarket.

Coles is offering a similar petrol discount, with savings of 10 cents per litre when customers spend $20 or more on groceries at its petrol station. Customers may receive a further 4 cents per litre upon presentation of a Coles shopper docket obtained by purchasing $30 worth of groceries in a Coles supermarket.

Both retailers have defended their fuel discount schemes whilst welcoming the opportunity to clarify the interpretation of the agreements in court.

“Coles vigorously defends our ability to offer our customer great value on both groceries and fuel,” Coles said in a statement.

“We welcome the opportunity to clarify conflicting interpretations of the voluntary undertaking on fuel discount dockets in court.”

Woolworths said in a statement that it did not believe they had breached the undertaking with their petrol bundling discount offers.

“We remain disappointed that we have been curtailed from offering greater petrol discounts to our customers,” Woolworths said.

Woolworths has also asked the court to declare that allowing customers to redeem both discounts at the same time is in accordance with the agreement, the statement said.

The hearing is set for April 3.

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