Supermarkets close to deal on fuel dockets

Woolworths and Coles are close to doing a deal with the competition regulator over their controversial petrol shopper docket schemes that could see a cap placed on steep discounting at supermarket-owned petrol stations while still preserving the popular budget-saving promotion for consumers.

The Australian Competition and Consumer Commission has been working closely with supermarkets and a deal is brewing that would take some political heat out of the issue, with a potential agreement possibly announced before Christmas.

It is believed the accord will place a limit on some of the discounting recently offered by supermarkets, putting an end to discounts as high as 45¢ a litre such as were offered by Woolworths this year.

The petrol shopper docket discounts, which typically sit at 4¢ per litre but can spike to between 20¢ and 40¢ off the bowser price for special promotions, has been a hot political issue this year with independent supermarkets and petrol stations howling it robs them of customers and drives them out of business.

In July ACCC chairman Rod Sims made his strongest comments on the shopper dockets by savaging both supermarket chains, saying the discounts were harming competition and that the nation could end up with only two retailers selling petrol. Mr Sims went as far as to direct Woolworths and Coles to only offer their customers a discount off supermarket items and not petrol.

In the lead-up to September's federal election independent retail groups called on both sides of politics to abolish the petrol shopper docket scheme, but the deal now at hand looks likely to fall short of that position in favour of a compromise that will still allow supermarkets to promote special fuel discount deals for their shoppers.

The breakthrough is being likened by insiders to a similar deal clinched four years ago in which Woolworths and Coles walked away from their restrictive covenant arrangements with shopping centres and opened the way for smaller retailers, such as German discounter Aldi, to enter the centres for the first time.

Both supermarket giants have strongly defended their right to offer petrol discounts and have hit out at the ACCC.

$1.3 billion in annual fuel sales linked to 1300 aligned petrol stations is at stake.

At a Senate estimates committee hearing last week Mr Sims said after an investigation begun in late 2012 he concluded the bulk of the fuel discounts were funded from supermarket businesses. "That is the key bit of information for our analysis to form a view about lessening competition, because the petrol market is getting affected by subsidies coming from one side of someone's business to another side."