ACCC set to allow shopper-docket discounts in BP/Woolworths deal

The Australian Competition and Consumer Commission has issued a draft decision proposing to grant conditional authorisation to a commercial alliance that would allow participating BP service stations to accept Woolworths shopper dockets and participate in the Woolworths Rewards loyalty program, if BP is successful in acquiring Woolworths’ service stations.

The authorisation has been proposed on the condition that the parties not offer fuel discounts from shopper dockets and the loyalty scheme above 4¢ a litre in total.

ACCC Chair Rod Sims says the Commission has long-standing concerns that these kinds of fuel discounts can have anti-competitive effects if they are at a level that is unable to be matched by otherwise efficient fuel retailers.

“The ACCC considers that fuel-discount offers in excess of 4¢ per litre could have longer-term effects on the structure of the retail-fuel markets and that the detriments from reduced competition may outweigh any benefits,” he said.

Mr Sims also says he recognises that giving consumers more opportunities to redeem shopper-docket discounts and earn and redeem points through Woolworths’ loyalty program “will likely result in some public benefits”.

The ACCC’s draft determination was welcomed by a BP spokesperson, who said: “The proposed arrangements will generate public benefits in the form of the additional availability of docket-redemption sites, greater uptake of docket discounts, and increased opportunities to earn and redeem benefits under the Woolworths Rewards loyalty program.”

The proposed shopper-docket and loyalty-scheme arrangements form part of a broader transaction between BP and Woolworths, where BP plans to acquire Woolworths’ network of service stations. The ACCC is conducting a separate merger review of that proposed acquisition.

The proposed shopper-docket and loyalty-scheme arrangements will occur only if the acquisition is completed.

The ACCC expects to release a final decision on the proposed acquisition on October 26.

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