Most industry stakeholders would be aware that the two major supermarkets entered into voluntary undertakings with the Australian Competition and Consumer Commission in 2012 in response to a substantial body of evidence pointing to the adverse competitive impact of high value shopper dockets on competition within the Australian retail fuels market.
Put simply, the ACCC sought to prohibit the two supermarkets from subsidising fuel purchases from their grocery businesses given that this mechanism (i.e. stacking) was not available to other fuel retailers – and given that the introduction of shopper dockets appeared to have been responsible for dramatic changes in retail market shares within the national fuel retail market.
“What is less well understood, however, is that these undertakings did not prohibit the use of shopper dockets but rather, required the supermarket retailers to fund the discount from their fuel businesses – not their grocery businesses – and capped the value of the discount at 4cpl”, said ACAPMA CEO Mark McKenzie.
The effectiveness of these agreements is self-evident. In the 7-year period since these arrangements were put in place, market shares have rebalanced towards not supermarket and independent fuel retails in a sustainable manner.
Changes in the nature of the alliance arrangements between Coles and Viva Energy announced late last year, however, meant that there was a need to revisit the nature of Coles Express’ undertaking with the ACCC.
It is understood that Coles subsequently made an application to the ACCC vary their undertaking with a view to bringing the the nature of the shopper-docket undertraining into line with the architecture of the new commercial arrangements that have recently been finalised with Viva Energy (The new arrangements effectively mean that Coles Express is selling fuel on behalf of Viva Energy on an ‘agency’ (or Commission) basis, as opposed to the previous arrangement where Coles Express purchased fuel on a wholesale basis from Viva Energy and retailed this fuel in its own right).
In its latest Quarterly Petrol Price Monitoring Report, released earlier today, the ACCC has advised the market that they had agreed to vary the Coles’ voluntary shopper docket undertaking in line with the changed operational arrangements between VIVA energy and Coles Express.
Importantly, the new arrangements maintain the 4cpl cap on the value of the shopper dockets that can be marketed by Coles Express in the future.
“The ACCC decision in respect of this matter is a welcome one in that it highlights the capacity of our national competition regulator to accommodate the inevitable changes in market structure that occur in our market from time to time, whilst simultaneously ensuring valid competition safeguards remain in place for all market participants”, Mark concluded.