Today’s deal between the ACCC and supermarket giants to cap ‘shopper dockets’ does not come as a surprise to ACAPMA CEO, Nic Moulis, who has welcomed the move.
Mr Moulis said the deal to reduce the depth of discounts, while not the perfect solution for smaller independent businesses, would relieve some pressure on financially-stressed operators.
“While the 4c a litre shopper docket discount looks here to stay, this agreement will put a stop to the deep and sustained price promotions that include discounts of 10, 20 and up to 45 cents a litre.
“It was these massive discounts that the regulator was obviously – and rightly – concerned about.”
Moulis said that over the course of the past four years, it is these discounts that have had a material effect on smaller independent operators. Citing ACCC data from 2009 to 2012, he indicated the petrol convenience industry has seen close to 1,000 of these operators close their doors for the last time.
“Petrol margins are low,” he said, “which means these discounts are being subsidised by other parts of the business.”
“In other words, the average Aussie consumer is paying for these deep discounts via the weekly supermarket bill.”
“As ACCC Chairman Rod Simms has reiterated on several occasions, if the practice of shopper dockets continued unabated the consumer would be worse off in the future.”
Moulis said the agreement would mean that these cross-subsidies would have to end, and the grocery, liquor, hardware and petrol arms of the supermarket giants would need to be ring-fenced from each other.
“The ACCC has shown it is concerned about this cross subsidisation, and the negotiations over capping shopper dockets probably included discussions on this matter,” he said
“This doesn’t mean that there won’t be large discounts now and then, but they will have to be more short-lived and they will be harder for the supermarkets to fund them.
“Coles and Woolworths now control close to 50 per cent of all retail fuel sold in Australia, this has reduced competition in the market and provided them with the power to control pricing.”
Moulis also indicated that the Federal Government’s promised ‘root and branch’ review of competition policy might throw up more cases of cross-subsidisation and other anti-competitive practices.
“While a deal may have been struck to limit shopper docket discounts, it does not address the serious competition issue facing the Australian economy,” he said.
“The ACCC must use the evidence gathered about the supermarket fuel businesses to inform this review of what can be done to strengthen section 46 of the Competition and Consumer Act, to tackle misuse of market power.
“Competition that benefits the consumer requires big business and small business to actively push each other. Unfortunately, in recent times Australia has only seen big business squash small business.”
Background:
The Australasian Convenience and Petroleum Marketers Association (ACAPMA) is a notforprofit employer organisation that has represented the interests of businesses in the petroleum distribution and petrol convenience industries for over 38 years.
As the leading association and national peak body responsible for the development and growth of the petroleum distribution and petrol convenience retail industries, ACAPMA members include over 90 per cent of the 120 businesses that operate in petroleum distribution and storage, while representing through direct ownership, operation or supply – over 3,500 service stations. ACAPMA’s membership profile in the main is independent smalltomedium businesses operating in metropolitan as
well as regional and rural Australia.
For more information about Australasian Convenience and Petroleum Marketers Association (ACAPMA), visit http://www.acapma.com.au
ACAPMA CEO, Nic Moulis
