Researcher says report using his data to claim Coles raises petrol prices to pay for milk discounts is misleading

The company whose data was used by the Daily Telegraph this morning to claim Coles has pushed up the price of petrol to offset huge discounts on milk says the data has been used incorrectly and the report is “horseshit”.

Informed Sources managing director Allen Cadd told SmartCompany this morning that while the data came from his company, the use of the data to create a graph that purports to show petrol prices spiking at the same time Coles was discounting certain products is misleading.

“I have never seen this graph before,” Cadd says.

Cadd says a proper analysis of the relationship would “take days, even weeks” and points out that the graph has been mislabelled, with the lines representing Coles and Woolworths the wrong way around.

“My whole business is built on accuracy, on being reliable. This graph is just horseshit,” he says.

The report quotes independent Senator Nick Xenophon, who told the Daily Telegraph that “these figures clearly show Coles petrol is consistently dearer than its competitors”.

The senator’s office was contacted this morning for comment in light of Cadd’s questioning of the report, but no reply was received before publication.

Cadd says while there is definitely cutthroat competition in the supermarket sector, it is extremely difficult to determine how an “average” price paid by motorists across a certain timeframe without first performing deliberate testing.

“If you look at a city like Melbourne, how do you work out the average? If I don’t know what volume of petrol is sold at what time of day, in each of the locations there, it’s got to be arithmetically wrong.”

“Secondly, an average is a poor man’s statistical tool. We don’t know what the average was based on what time of day, because in the petrol cycle you’ve got prices going up and down during different parts of the day.”

Cadd says because most people buy their petrol on days of the week when prices are cheaper, the graph itself ignores how much petrol is actually being consumed.

“Has the average been calculated based on the day? Coles could be giving out cheaper petrol on the days when they are selling more, and so on.”

That argument was echoed by a Coles Express spokesperson, who said in a statement that “the chart does not reflect the realities of Coles Express’ fuel pricing as it relies on average point-in-time weekly price data and doesn’t account for factors such as like-for-like site level comparisons and localised price movements”.

Cadd says he is furious that such data has been used without even being asked if the company could be attributed.

“The journalist did not even do us the credit of ringing us, and asking,” he says, adding the analysis did not come directly from the company, but from a third-party.

“Somebody who is in receipt of our data, has had somebody in their company produce all of this, and some over-zealous public relations officer has said, ‘Hey, this is a good story’.”

Daily Telegraph journalist Rhys Haynes, to whom the story is attributed, also confirmed this morning the data was sourced from a third-party.

Coles repeated in a statement this morning that “Coles Express petrol prices do not subsidise lower grocery prices at Coles”.

Such questions were put to Coles managing director Ian McLeod yesterday at the Senate inquiry into milk prices, and he replied the decision was made to discount prices due to the “hardship facing many Australian families”.

Coles also said in the inquiry that it is still making profit on its milk products, a position it is expected to affirm during today’s questioning.