Breached ... Woolworths new shopper dockets did not hold up in court. Photo: Glenn Hunt
The Federal Court on Monday ruled that supermarket giant Woolworths breached undertakings made to the regulator this year that limited it to a standard discount of 4 cents per litre off petrol.
Last year the Australian Competition and Consumer Commission reached a deal with Woolworths and Coles that limited discounts on shopper dockets earned at supermarkets to 4 cents per litre.
However, both chains quickly introduced new schemes that allowed shoppers to up their discounts by spending money at the petrol station convenience store with a Woolworths scheme allowing shoppers to boost the fuel discount to 8 cents per litre.
Watchdog quick to act
The ACCC immediately reacted to enforce its undertakings, with the court, in its judgment on Monday, ruling it as a breach of its deal with the regulator.
The ACCC had alleged that Woolworths’ initial 4 + 4 cents fuel discount offer was conditional on Woolworths supermarket purchases and breached its undertaking from last year because the discount was only available to a customer who has made a qualifying supermarket purchase.
From 10 March 2014, after the proceedings had commenced, Woolworths introduced a new offer so that the 4 cent discount for purchases of $5 or more in the petrol station was available without a supermarket purchase, although it could also be used in conjunction with the 4 cent discount offer on qualifying fuel purchases.
It took action to defend its offer, asking the court to declare at the time that its ‘‘stacked’’ 8 cent per litre discount offer met with the undertakings it made to the ACCC in December.
A spokeswoman for Woolworths said on Monday: ‘‘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 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.’’
The spokeswoman also said Woolworths would continue to offer 8 cents a litre discounts on petrol.
''We are pleased that the Court's decision backs our position.''
The ACCC had alleged that Coles’ offer of a bundled discount of 14 cents per litre (10 + 4 cents) breached Coles’ undertaking to the ACCC made last year. As the discount of 14 cents per litre is only available to a customer who has made a qualifying supermarket purchase and because it exceeds 4 cents per litre, the ACCC alleged that this was a breach of Coles’ undertaking not to offer or allow a discount of more than 4 cents which is contingent on a qualifying supermarket purchase.
The Court dismissed the ACCC’s proceedings against Coles today on the basis that only 4 cents of the total bundled discount of 14 cents per litre was contingent on a qualifying supermarket purchase.
A spokesman for Coles this afternoon said the decision was good news for customers who benefited from these discounts.
''All we were trying to do was bring together two separate offers that the ACCC was happy with individually and allow customers to use them together for maximum value and convenience. We are pleased that the court has agreed with us.”
The shopper docket scheme has generated a huge amount of political debate, and in the lead up to last year’s election a number of independent retailers and fuel operators tried to make it a campaign issue, claiming the fuel discount schemes operated by Woolworths and Coles were squeezing them out of the industry.
The ACCC had been investigating the popular shopper dockets for more than a year with chairman Rod Sims speaking out strongly about the discounts a number of times, claiming they could greatly weaken competition and if left uncheck leave Woolworths and Coles as the only players in the petrol industry.
Mr Sims said in a statement on Monday: “The ACCC welcomes the decision that offering a 4 + 4 cent fuel discount conditional on supermarket purchases breaches the undertaking to the ACCC.
“The ACCC is pleased that the judgment also makes it clear that bundling of supermarket fuel offers greater than 4 cents in a single acquisition of fuel will not be permitted,” said Mr Sims.
“We are disappointed however that the Court has found that Coles and Woolworths can bundle a supermarket fuel offer with a petrol station offer."
Mr Sims said the ACCC would carefully consider the judgment and its implications for competition in fuel markets and any detrimental price impact on fuel consumers.
‘‘But it is significant that the undertakings continue to prevent Coles and Woolworths offering fuel discounts that are subsidised by their supermarket operations,” Mr Sims said.