Watch­dog wary of Woolies- BP $ 1.8b ser­vos merger

Townsville Bulletin - - NEWS - KA­RINA BARRYMORE

CON­SUMERS could face higher petrol prices if Wool­worths is given ap­proval to sell its Cal­tex ser­vice sta­tions to ri­val petrol com­pany BP Aus­tralia for $ 1.8 bil­lion.

The Aus­tralian Com­pe­ti­tion and Con­sumer Com­mis­sion said the pro­posed deal could “sub­stan­tially lessen com­pe­ti­tion”.

“The trans­ac­tion could see re­tail­ers face less com­pet­i­tive pres­sure to keep their prices low and as a re­sult mo­torists may end up pay­ing more at the pump,” ACCC chair­man Rod Sims said yes­ter­day.

“The pro­posed ac­qui­si­tion re­moves Wool­worths’ in­flu­ence on metropoli­tan mar­kets and we are con­cerned that BP would not fol­low Wool­worths’ pric­ing strat­egy. Com­pe­ti­tion may be­come softer, cost­ing con­sumers.”

Wool­worths owns 528 ser­vice sta­tions which sell Cal­tex petrol. BP owns or sup­plies 1400 ser­vice sta­tions which sell BP petrol. All the Wool­worths sta­tions will be re­branded BP.

An­other con­cern raised by the ACCC was the po­ten­tial im­pact on prices for con­ve­nience gro­cery con­sumers.

How­ever, BP said the ACCC’s con­cerns were “rou­tine” and were just the reg­u­la­tor’s pre­lim­i­nary views.

“We are con­fi­dent we can work with the ACCC to ad­dress the is­sues they have raised,” BP Aus­tralia pres­i­dent Andy Holmes said.

“We be­lieve that Aus­tralian re­tail fuel and con­ve­nience mar­kets are highly com­pet­i­tive and will re­main so fol­low­ing the com­ple­tion of the trans­ac­tion,” Mr Holmes said.

In a state­ment, Wool­worths said it would “con­tinue to work with BP and the ACCC to progress the merger clear­ance process”.

Ac­cord­ing to BP and Wool­worths, af­ter the trans­ac­tion the two com­pa­nies will form a “part­ner­ship” and in­clude a 4c a litre shop­per- docket petrol dis­count for Wool­worths cus­tomers and in­tends to ex­pand the dis­count to other BP out­lets. Cus­tomers at BP out­lets will also be of­fered the op­tion to ac­cu­mu­late Wool­worths loy­alty points.

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