ACCC flags concerns about BP’s proposed acquisition of Woolworths sites

The Australian Competition and Consumer Commission (ACCC) says the proposed acquisition by BP Australia Pty Ltd of Woolworths Limited’s network of retail service-station sites may substantially lessen competition for the retail supply of fuel across metropolitan areas and is seeking feedback from interested parties.

ACCC Chairman Rod Sims says Woolworths appears to influence retail-market fuel prices by either leading price reductions, or quickly following other retailers that reduce prices, especially in the downwards phase of metropolitan price cycles.

“The proposed acquisition removes Woolworths’ influence on metropolitan markets and we are concerned that BP would not follow Woolworths’ pricing strategy,” Mr Sims said. “Competition may become softer, costing consumers.

“We are investigating this issue from a metropolitan-wide perspective in the major Australian cities.”

The ACCC is also analysing the effect of the proposed acquisition on local markets in the vicinity of individual Woolworths’ service stations across Australia. It will publish preliminary views on local market issues in coming weeks. BP has stated publicly that it intends to divest sites in certain local areas.

According to the ACCC, the proposed acquisition is a complex transaction with hundreds of local areas to consider, each with their own unique competitive dynamics and features. Another area of concern raised by market participants was the effect of the proposed acquisition on convenience groceries.

“This is another part of the transaction that requires examination to see what the likely impact would be on competition and prices,” Mr Sims said.

Following the proposed acquisition, BP and Woolworths propose to enter into a commercial alliance, including a new retail-convenience offering, called Metro@BP. Woolworths’ shopper docket discounts and loyalty programme would also be available at certain BP sites.

The ACCC’s Statement of Issues is available on the public register and interested parties are invited to submit their responses by September 7.

Responding to the Statement of Issues, BP Australia President Andy Holmes said: “We believe that Australian retail fuel and convenience markets are highly competitive and will remain so following the completion of the transaction.

“We are confident we can work with the ACCC to address the issues they have raised and we look forward to obtaining clearance at the end of this process.”

The ACCC’s final decision is scheduled for 26 October 2017.

Similar Articles


Most Popular

Subscribe to our newsletter

To be updated with all the latest news, offers and special announcements.