Woolworths cuts linked fuel discounts ahead of ruling

The Australian
WOOLWORTHS has pre-empted part of a Federal Court ruling today by unilaterally deciding that it will no longer link fuel discounts at its supermarkets and petrol stations.
Woolies has been offering shoppers an 8c-a-litre fuel discount if they first qualified for a 4c-a-litre discount by purchasing $30 of groceries, and then topped it up with a similar discount by spending $5 on convenience items in a company-owned petrol station.
As a result of action taken in the past few weeks, the offers are now independent of each other and no longer linked.
A spokeswoman for Woolies confirmed yesterday that the linked offer had been withdrawn.
“We said at the time when we sought a declaration from the Federal Court that we had discussed with the Australian Competition and Consumer Commission making our discounts independent of each other,” she told The Australian.
“We believe our current petrol discounts are allowed under the undertaking made with the ACCC in December last year, and we look forward to the court providing clarity around this,” she said.
Woolies action on the linked fuel offers has pre-empted one element of today’s Federal Court ruling.
The Federal Court, however, will also decide if “bundled” fuel discounts, which are still offered by both Woolies and Coles, are in breach of the ACCC undertaking.
In February, when it announced it would seek the court’s guidance, Woolies said it believed that the undertaking allowed customers to combine offers of 4c from the supermarket and 4c from the pump for a total discount of 8c a litre.
The ACCC, however, believes that customers should only have access to one 4c offer at a time.
Chairman Rod Sims said last month that fuel discounts by the giant retailers could have longer- term, adverse competition effects on retail fuel markets, and also increase general pump prices.
Mr Sims noted that, since February 6, Coles Express petrol stations had been offering a fuel saving of 10c a litre when consumers spent $20 or more on groceries at the petrol station, along with a further 4c-a-litre discount in the same transaction if they spent $30 on groceries in a Coles supermarket.
Woolies chief executive Grant O’Brien said in February that he was disappointed the retailer had been prevented from offering greater fuel discounts to customers.
He pointed out that, even on the ACCC’s own figures, the market share of independent fuel retailers had increased from 17 per cent to 18 per cent.