Woolworths breached fuel discount deal with ACCC, court finds
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Version 0 of 1. Supermarket giant Woolworths breached an undertaking it made to Australia’s consumer watchdog to limit petrol discounts offered on grocery purchases to four cents per litre, the federal court has ruled. Woolworths and its rival Coles reached an agreement with the Australian Competition and Consumer Commission (ACCC) in December to cap the petrol discounts issued when customers purchased groceries from the supermarket arms of each business. The deals were heavily subsidised by the supermarkets, which in the case of Coles, bore up to 75% of the cost of the discounts offered at its service stations. The watchdog was concerned that the bundling tactic was unfairly crowding out smaller independent retailers, and could eventually see petrol prices increase. “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 just two companies in the country selling petrol,” the ACCC chairman, Rod Sims, said. In February, the ACCC launched legal proceedings against both supermarkets, alleging they had breached the deal by continuing to offer the bundled deals. The court ruled on Monday that Woolworths had breached its undertaking by offering a 4c petrol discount when customers spent $30 on groceries in its supermarket and then an additional 4c discount if they spent another $5 on convenience items in its service stations. "It follows, in my opinion, that the 8c per litre discount on the single acquisition at retail of fuel was contingent on the acquisition of Woolworths supermarket (non-fuel) goods or services since, as a matter of the terms and conditions of the offer, the customer could not obtain that discount absent the customer's satisfying the prerequisite," Justice Robertson said. Woolworths later amended the deal to allow customers to redeem the two discounts separately. The court ruled that this latter promotion, and a similar deal offered by Coles, did not breach the undertaking. “We are pleased the court has provided the clarity we sought on ‘bundling’ petrol offers,” Woolworths said in a statement. “We said at the time when we sought a declaration from the federal court that we accepted we needed to make our discounts independent of each other, and this change was implemented some time ago,” it said. The parties were ordered to deal with costs within 14 days. |