Woolworths considers ACCC challenge over BP deal
The supermarket giant struck a deal in December, 2016, to sell its 527 petrol stations and convenience stores and 16 development sites to BP for $1.8 billion.
But the Australian Competition and Consumer Commission rejected the deal in December last year, arguing BP’s acquisition would substantially lessen competition in fuel prices.
Banducci said the company was disappointed in the ACCC’s decision and now that is has traded the busy Christmas season, the group was considering its options.
Those options include launching a court challenge to overturn the ACCC’s opposition or restructuring the sale.
“We are regrouping and assessing our options for the business but our main focus is to ensure there is minimal disruption to our team members and customers at this time,” Banducci said.
According to the ACCC’s latest quarterly petrol report, average petrol prices in Australia’s five largest cities increased significantly in the December 2017 quarter and hit their highest levels since 2015.
The ACCC found that average petrol prices in Sydney, Melbourne, Brisbane, Adelaide and Perth increased by 12.6 cents per litre in the quarter to 135.1 cents per litre.
“Retail prices in the larger capital cities can vary by around 25 cents per litre to 30 cents per litre near the time that price cycles are increasing,” said ACCC Chairman Rod Sims.
Higher international crude oil and refined petrol prices and a lower AUD-USD exchange rate contributed around two-thirds of the increase in retail prices. The rest was due to high gross retail margins.
“Petrol retailers’ margins are the highest they have ever been and motorists are paying for it. Last quarter alone, average gross retail margins in the five largest cities were 14.2 cents per litre, an increase of 3.9 cents per litre from the previous quarter,” Sims said.
Annual average gross retail margins in calendar year 2017 were over 4 cents per litre higher than the average margin over the past 15 years, which was 8 cents per litre.
“The ACCC accepts that some of the increase in gross retails margins has been due to increased costs, the information we have, however, indicates that this contribution does not explain the bulk of the increase,” Sims said.
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