Woolies petrol sale under scrutiny by competition watchdog

A potential sale of Woolworths’ $1.5 billion petrol portfolio will be under the watchful eye of the Australian Competition and Consumer Commission (ACCC), according to its chairman, Rod Sims.

Last week Woolworths confirmed it was in discussions with “a number of interested parties” over its 500 store network of petrol and convenience sites.

Mr Sims told Fairfax Media this week the ACCC wants to keep the already fairly concentrated petrol market competitive with any sale to be “closely scrutinised”, stating his preference would be for a new player to buy Woolworths’ network to maintain the current level of competition.

In 2010 the ACCC blocked a bid by Caltex for the former Mobil service station network on the grounds of market domination. That blocking by the competition watchdog resulted in 7-Eleven buying most of the Mobil sites.

“We have a particular interest in the petrol retailing market. We want to make it and keep it as competitive as it can possibly be, so it’s fair to say that any sale to any existing player is going to be extremely closely scrutinised by us,” Mr Sims told Fairfax.

“There are two players with nearly half of the market and then another two with decent chunks of it so it’s a reasonably concentrated market,” he said. “No one’s going to be surprised that we’ll look at any deal pretty thoroughly.”

Caltex was reported last week to be the sole bidder for Woolworths’ petrol business, with the retailer entering the final stages of negotiations, however, BP and Vitol are also now rumoured to be in discussions with the supermarket giant.

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