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Coles and Woolworths petrol discounts safe: ACCC

Coles and Woolworths petrol discounts safe: ACCC

The ACCC has confirmed today that substantial fuel discounts offered by major supermarkets did not breach the Trade Practices Act 1974 (TPA).The discounts, instigated by Coles and followed by…

The ACCC has confirmed today that substantial fuel discounts offered by major supermarkets did not breach the Trade Practices Act 1974 (TPA).

The discounts, instigated by Coles and followed by Woolworths, offered consumers up to 40 cents per litre off fuel if they spent up to $300 in a single transaction at a Coles or Woolworths store during the period 13 - 15 July 2009.

Coles and Woolworths came under fire when the discounts were first announced, with independent senator for South Australia Nick Xenophon saying that they indicated that supermarkets and oil companies were overcharging consumers.

"If they can offer discounts at this level, surely this is proof that the big oil companies and supermarket chains are over-charging massively when they aren't offering discounts," he said. "This is further proof that a handful of companies have Australian motorists over a barrel."

"The ACCC should be asking Coles and Woolworths serious questions about this offer. Will they lose money through this offer, and if so, how much? And if they don't lose money on this deal, how can they justify their undiscounted petrol prices?"

The ACCC commenced a review in mid July to determine whether the discounts were aimed at driving competitors out of business, and therefore in breach of the TPA. It concluded, however, that the discounts were not anti-competitive. ACCC Petrol Commissioner Joe Dimasi said: "We have formed the view that these one-off promotions do not breach the TPA."

Dimasi noted that major wholesaler Metcash - a distributer to independent supermarkets - also offered equivalent discounts to consumers. "This shows us that other players in the market have the ability to match the short term competitive pressures of companies such as Coles and Woolworths," he said. "This is competition acting in the interests of Australian consumers."

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