Extra fuel discount offers can continue

Federal Court finds supermarket giant breached undertakings to the ACCC.

Coles and Woolworths will still be able to offer fuel discounts of more than 4c per litre after a federal-court decision uncovered a loophole in an agreement the supermarkets signed last year with the competition watchdog.

In a decision handed down in Melbourne, the court ruled that the supermarket giants could offer discounts in addition to the standard 4c offer provided that shoppers were not required to have already made a supermarket purchase.

In addition to its standard offer of a 4c discount per litre for shoppers spending at least $30 in its supermarkets, Woolies had been allowing shoppers to increase the discount to 8c per litre by spending a minimum $5 at the convenience stores attached to its chain of petrol stations.

The Australian Competition and Consumer Commission claimed the offer was in breach of undertakings both Woolworths and Coles made last year under which they would cap its supermarket discount offer at 4c per litre -- a claim that has now been upheld by the court.

However Woolworths separated the offers in March so that shoppers could still bundle the 4c discount for supermarket shopping and the 4c off for spending $5 in its convenience stores to achieve a total discount of 8c per litre, but the convenience store offer was no longer contingent on having already spent money in Woolies’ supermarkets.

The court found that while the original linked offer was in breach of the undertaking, the rejigged offer was not.

A Woolworths spokeswoman said the company was pleased the court had provided clarity on bundling fuel offers together.

“This provides us with the certainty to continue offering customers maximum value at the pump,” the spokeswoman said.

The court also found that Coles had not breached the undertaking with an offer that allowed shoppers to save 14c per litre by combining a 4c supermarket voucher with a 10c voucher received for spending a minimum $20 in a Coles Express store.

The ACCC had alleged that Coles’ offer of a bundled discount of 14 cents per litre breached Coles’ undertaking to the ACCC, as it was only available to customers who made a qualifying supermarket purchase.

However the Court dismissed the ACCC’s case against Coles on the basis that only 4c of the total discount of 14c was contingent on a qualifying supermarket purchase.

A Coles spokesman said the decision was good news for customers.

“All we were trying to do was bring together two separate offers that the ACCC was happy with individually and allow customers to use them together for maximum value and convenience,” the spokesman said.

ACCC chairman Rod Sims said the regulator welcomed the decision that offering a 4c plus 4c fuel discounts conditional on supermarket purchases breached the supermarkets’ undertaking to the ACCC.

“We are disappointed however that the court has found that Coles and Woolworths can bundle a supermarket fuel offer with a petrol station offer,” he said.

“We will carefully consider the judgment and its implications for competition in fuel markets and any detrimental price impact on fuel consumers. But it is significant that the undertakings continue to prevent Coles and Woolworths offering fuel discounts that are subsidised by their supermarket operations.”

The ACCC spent more than a year investigating supermarket fuel discount vouchers, on the grounds that it comprised illegal cross-subsidisation and unfair competition that would hurt consumers in the long run.

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