The Australian Competition And Consumer Commission (ACCC) has launched proceedings in the Federal Court against supermarket giants Coles and Woolworths over their shopper-docket fuel discount schemes.
The ACCC alleges Coles and Woolworths have both breached their commitments to self-regulate their shopper-docket discount schemes, limiting discounts to four cents-per-litre.
Both supermarkets currently offer extended discounts to customers who make a ‘qualifying supermarket purchase’, with Woolworths’ “4+4” discount scheme and Coles offering combined discounts of up to 14 cents-per-litre.
While both Coles and Woolworths maintain they are absorbing any losses through their fuel retailers - as per the agreement - the ACCC maintains that the continuation of extended discounts for qualifying purchases breaches the terms of the agreement.
“The ACCC takes alleged breaches of undertakings extremely seriously, as such undertakings are generally accepted by the ACCC as an alternative to the ACCC taking court enforcement action,” ACCC Chairman Rod Sims said.
“Following an extensive investigation, the ACCC had been concerned that fuel savings offers could have longer-term effects on the structure of the retail fuel markets and also short term effects of increasing general pump prices in those markets.”
“Where there is a dispute between the ACCC and a party which has given a court enforceable undertaking and the ACCC considers that there is non-compliance with the undertaking, as is the case here, the ACCC will take prompt court action to enforce the undertaking.”
The ACCC is seeking declarations, costs and other orders be enforced upon Coles and Woolworths.
Motoring bodies from around Australia have expressed their support for the ACCC’s court action, including Queensland’s RACQ.
“The RACQ has long called for the ACCC to become more involved in fuel pricing issues and we are delighted it’s taking an active role in ensuring Queensland motorists receive a fair go,” RACQ’s Paul Turner said.
“We believe shopper docket discounts have led to higher prices overall, which is why it is so important the fuel discount cap isn’t breached.”
In separate proceedings, Woolworths has sought a declaration in relation to a proposed future fuel discount offer, which the ACCC also considers would breach Woolworths’ undertaking.
Directions hearings for the ACCC action against Coles and Woolworths are set for April 3, 2014 in the Federal Court in Sydney.