Proposed Milemaker acquisition a concern: ACCC

Caltex Australia Petroleum’s proposed acquisition of a chain of 46 service stations in Victoria from Milemaker Petroleum may substantially lessen competition for the retail supply of petrol in Melbourne, according to the Australian Competition and Consumer Commission (ACCC).

ACCC Chair Rod Sims says Milemaker is a significant independent chain in Victoria, with a distinct strategy to price lower than the major operators.

“Milemaker generally has average prices that are lower than Caltex’s, is quick to discount, and often slow to respond to the large price increases that characterise the retail petrol price cycle,” he said.

“The ACCC’s studies of retail petrol markets have shown that competitive outcomes are better when there are more of these vigorous competitors in the market.”

Most consumers may be unaware of Milemaker because its sites are branded Caltex and are difficult to distinguish from Caltex’s company-operated sites. But the Milemaker sites set retail prices independently of Caltex (aside from diesel at certain sites).

“The ACCC’s initial observations suggest that the proposed acquisition may remove a vigorous and effective competitor in retail fuel in Melbourne,” Mr Sims said.

“Our concern, therefore, is that the acquisition may lead to Melbourne motorists paying more for petrol.”

The ACCC invites further submissions from interested parties in response to the Statement of Issues by March 30 and will announce its final decision on April 20.

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