BP given thumbs down on Woolies petrol buyout

14 December, 2017, 11:14 | Author: Regina Silva
  • MERGER DISAPPROVAL Any Caltex Woolworths and BP union plans are on hold as the ACCC intervenes

"We believe that fuel prices will likely increase at the Woolworths sites if BP acquires them and other retailers would then face less competitive pressure".

"Not only does BP charge a substantially higher price than Woolworths, data shows BP is usually one of the first to increase its price, and slower to decrease".

"This has been the most significant merger investigation and decision the ACCC has considered in 2017", Rod Sims, chairman of the regulator, said.

"Many consumers seeking out cheaper petrol will head to Woolworths petrol stations", Mr Sims said in a statement.

Today's decision appears to be a win for both consumers and Caltex which supplies numerous Woolworths service stations.

RACQ spokesperson Renee Smith said the motoring body was pleased the consumer watchdog had acknowledged the proposed takeover would substantially lessen competition.

"We support the ACCC's decision".

"With Christmas fast approaching, there are always price hikes in petrol around this time of year", he said.

Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell was quick to welcome the decision.

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She said it would help maintain a level playing field and preserve competition.

"In light of this, we are now consulting with our lawyers to determine our next steps".

The ACCC Chairman, Rod Simms, believes BP would be unlikely to pass on the same discounts that Woolworths does and believes that wouldn't be good news for auto owners.

The Australian Competition and Consumer Commission, which had flagged its concerns several months earlier, said it had determined that a proposal from BP to sell some of the sites it aimed to acquire from retailer Woolworths Ltd. (WOW.AU) wouldn't address its concerns.

A BP spokeswoman told The New Daily the company believes the retail fuel markets would have remained "highly competitive" should the acquisition have gone ahead.

"After the proposed acquisition this figure would increase to about 13 per cent".

In its latest Annual Report, Woolworths disclosed that on 24th December 2016 it entered into a binding agreement with BP, to sell its 527 "fuel convenience sites" and 16 "committed development sites".

According to the ACCC, BP already supplies fuel to around 1,400 BP-branded service stations nationally, and has direct control over setting the prices at around 350 of those sites.

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