ACCC fuel price investigation: Lobby groups state demands

Australia's competition watchdog, the ACCC, announced on Thursday last week that it was investigating the exchange of fuel pricing information between retailers.

“While the ACCC does not usually comment on its current investigations, the ACCC considered it appropriate to inform the public that it is undertaking this investigation given the significant public interest regarding petrol pricing,” said Rod Simms, Chairman of the ACCC (Australian Competition and Consumer Commission).

It's the ACCC's view that the frequent exchange of pricing information between retailers, who are nominal competitors, is anti-competitive by its nature. The ACCC has launched the investigation in response, after plenty of notice to the industry that fuel retailers might be in breach the Competition and Consumer Act, 2010.

Counter-responses from those with a vested interest came within 24 hours of the news breaking. First came the AAA (the Australian Automobile Association), with its demands on behalf of motorists.

“There have been many enquiries into the petrol industry over the years but ordinary motorists have seen little benefit,” said AAA Executive Director Andrew McKellar, as quoted in a press release.

“History shows that motorists are right to be sceptical about the benefit of these investigations and I’d like to see real action come from this not just more talk,” he said.

“Motorists deserve improved price transparency and a level playing field to access information so they can make informed decisions before filling up,”

“The ACCC must also examine areas that can have immediate results for motorists such as improving fuel price boards, standardising the information displayed and reducing confusion.”

The AAA's press release was quickly followed by one from the Victorian Automobile Chamber of Commerce (VACC). In the VACC's release, it was cogently explained that the Chamber once represented over 3000 independent service stations, but since the rise of the supermarkets, acquiring retail fuel outlets and turning them into convenience stores, the number of independents in the state of Victoria had fallen to just 215. David Russell, the VACC's Senior Manager for Government and Public Affairs, was very clear as to who the miscreants are — and who should be found at fault by the ACCC.

“VACC wants to see fair competition in the retail fuel sector," Russell was quoted as saying in the press release. "The number of independent service stations in Victoria is dwindling mainly because the big supermarkets and their fuel partners dominate the market through shopper docket discount schemes and in-store incentives. They have a vice-like grip on Australia’s retail fuel industry. This has had a detrimental effect on our independent service stations.”

“VACC would like to see ACCC’s dedicated investigation team and ACCC’s commissioner tasked with petrol, Joe Dimasi, seize this opportunity and examine competition in the retail fuel industry and its impacts on motorists.

“Independent service station owners are price followers, not price setters. They are disadvantaged by a lack of competition in the wholesale market where they do not have the buying power and they are disadvantaged in the retail market because they do not have the ability to heavily discount fuel.

“We hope this investigation by ACCC leads to the value of independent service stations being fully appreciated. The independent service stations are the only competition the supermarket fuel retailers have to contend with. Without the independent service stations, the supermarket fuel retailers will have little or no competition. This is not a good outcome.

“VACC calls for more protection for our few remaining independent service stations. Forty years ago, VACC had 3,050 independent service station members. Today, there are 215. This drop is largely down to the rapid rise of the supermarket fuel retailers who, today, control close to fifty per cent of the Australian retail fuel market.”

And the AAA took a swipe at the big retail chains too, but was a little more subtle about it.

“There is a need for national regulations to be introduced forcing retailers to show motorists the real cost of fuel, not just the discounted price when using a coupon or other special conditions,” Andrew McKellar said.

Hot button issue with the public? It will be if the ACCC doesn't come up with the goods...

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