Woolies suffers setback

WOOLWORTHS says it is disappointed at the consumer watchdog’s decision to oppose the $1.8 billion takeover of its service stations by BP Australia, and will assess its options.

The Australian Competition and Consumer Commission said the deal would substantially lessen competition as fuel prices would probably increase at the Woolworths sites if BP were to buy them.

Woolworths operates 531 sites and has 12 sites in development, while BP supplies fuel to about 1400 BP-branded service stations throughout Australia, setting prices at roughly 350.

Following a nine-month review of the acquisition, ACCC chairman Rod Sims said Woolworths was a “vigorous and effective” competitor that had an important influence on fuel prices and price cycles in many markets.

“The bottom line is that we consider motorists will end up paying more, regardless of where they buy fuel, if this acquisition goes ahead,” Mr Sims said.

Woolworths said it would work with BP to assess the options.

Meanwhile, Caltex Australia said it would continue to provide reliable and high-quality fuel to Woolworths and its customers in line with its supply agreement.

In a separate decision, the ACCC said it would conditionally approve Woolworths and BP’s proposal in regards to shopper docket and rewards loyalty program.