BP limber as ACCC looms

STEPHEN BARTHOLOMEUSZ
The Australian
The proposed $1.8 billion acquisition of Woolworths’ fuel and convenience store business is entering a critical phase, with the Australian Competition and Consumer Commission starting to take market soundings on a deal that is dependent on an ACCC clearance.
There’s more to BP’s proposed acqusition of Woolies fuel business than meets the eye, at least as far as the ACCC is concerned.
At a superficial level, the acquisition faces formidable competition policy hurdles at both a wholesale and retail level. It would lift the BP brand into market leadership of both the wholesale and retail segments of the market.
With ACCC making it clear earlier this month that it has ‘’issues’’ with the far smaller $95 million proposed acquisition of the family-owned but Caltex-branded Milemaker 46-site retail network in Victoria, it would be easy to draw the conclusion, as some have, that the BP deal with Woolworths is doomed.
Nothing in the petrol business is that straightforward and BP and Woolworths will inevitably argue, with some validity, that their deal is not only quite different to the Caltex/Milemaker deal but has a number of pro-competitive strands to it.
The crux of the issue the ACCC will wrestle with lies in the nature of BP’s relationships with the canopies that bear its brand.