The Australian Competition and Consumer Commission (ACCC) has released a Statement of Issues regarding BP’s proposed acquisition of Woolworths’ petrol sites.
The ACCC has outlined that the proposed acquisition may harm competition across metro areas for retail fuel supply.
ACCC chairman Rod Sims said the transaction would reduce the number of rivals in fuel retailing.
“The transaction could see retailers face less competitive pressure to keep their prices low and as a result, motorists may end up paying more at the pump,” he said.
“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. Competition may become softer, costing consumers.”
Mr Sims said the ACCC was investigating the issue from a metropolitan-wide perspective.
“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,” he said.
Another issue that has been raised is the impact the acquisition would have on c-stores and independent grocers.
In response, BP said it is confident that it can address the issues raised by the ACCC.
BP Australia President Andy Holmes said:“the release of the Statement of Issues is a routine part of the process in the ACCC’s review of complex transactions, reflects the ACCC’s preliminary views and signifies that the review is progressing.”
“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,” he said.
“We believe that Australian retail fuel and convenience markets are highly competitive and will remain so following the completion of the transaction.”
The acquisition proposes a commercial alliance with both BP and Woolworths, offering a new retail convenience store called [email protected]
Mr Holmes said [email protected] would be the first of its kind within the convenience sector.
“…bringing together BP’s quality fuels, Woolworths Rewards and a new range of high quality, fresh take-home food,” he said.
The final decision from the ACCC is expected October 26th 2017.