Woolworths found guilty of breaching fuel shopper docket undertaking

The Federal Court has found supermarket giant Woolworths in breach of a court enforceable undertaking provided to the Australian Competition and Consumer Commission in relation to fuel shopper dockets.

Woolworths offered consumers a four plus four cent fuel discount offer for the first three months of this year, conditional on Woolworths supermarket purchases.

The Federal Court found this deal breached a voluntary court enforceable undertaking entered into by Coles and Woolworths in December last year which stipulated the supermarkets would limit fuel discounts linked to supermarket purchases to no more than 4 cents per litre.

Despite this victory for the competition watchdog, the Federal Court dismissed other allegations brought forth by the ACCC against the supermarkets in relation to other recent bundled offers.

In February the ACCC launched court action against the retail giants, questioning whether the supermarkets could allow customers to bundle together discount vouchers to increase the value of the discount.

The court ruled the supermarkets were able to bundle offers, so long as only four cents of the offer was reliant on a qualifying supermarket purchase.

This decision cleared moves by Coles and Woolworths to give consumers greater discounts by bundling offers. From March this year Woolworths ran an offer giving consumers a four cent discount when something of $5 or more was purchased from the petrol station. This was then able to be used in conjunction with a four cent discount offer on qualifying fuel purchases. 

Since agreeing to an enforceable undertaking, Coles had also offered consumers a 14 cent discount, by allowing drivers to combine a 10 cent fuel discount with a four cent fuel docket acquired through making a supermarket purchase.

ACCC chairman Rod Sims said in a statement the watchdog was disappointed the court found Coles and Woolworths could combine supermarket offers with petrol station offers.

“We will carefully consider the judgment and its implications for competition in fuel markets and any detrimental price impact on fuel consumers,” he says.

“But it is significant that the undertakings continue to prevent Coles and Woolworths offering fuel discounts that are subsidised by their supermarket operations.”

Sims said he was pleased the judgment made it clear the bundling of supermarket fuel offers greater than 4 cents in a single acquisition would not be permitted.

Woolworths also claimed victory and responded to the decision in a statement saying it was pleased the court had backed its position.

 “We are pleased the court has provided the clarity we sought on ‘bundling’ petrol offers.  This provides us with the certainty to continue offering customers maximum value at the pump. We will continue to offer eight cents a litre petrol discounts,” Woolworths says.

“We said at the time when we sought a declaration from the Federal Court that we accepted we needed to make our discounts independent of each other, and this change was implemented some time ago.”

SmartCompany contacted Coles, but had no response prior to publication.

When the court action was launched against the retailers in February, Master Grocers Australia chief executive Jos de Bruin told SmartCompany it was pleasing to see the ACCC take action.

“It is extraordinary that Coles and Woolworths are accused of breaking their voluntary agreement with the ACCC less than three months after it was struck,” he says.

“It is right that the ACCC launch this prosecution because it shows that these two companies – which are amongst the biggest in Australia – are not beyond the law.”

De Bruin says fuel shopper dockets are “devastating” to grocery businesses.