ACCC delays consideration of BP/Woolworths acquisition

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At the request of BP and Woolworths, the ACCC has delayed its consideration of BP’s proposed acquisition of the Woolworths’ retail service-station sites so that the ACCC can consider further information from the parties. The expected new decision date is December 14, 2017.

ACCC Chairman Rod Sims said this is a significant decision for the retail petrol market in Australia.

“This potential transaction involves complex, extensive data analysis of fuel prices across all fuel sites in Australia over a number of years, and it’s vital we take the time to thoroughly assess its likely impact,” he said.

BP supplies fuel to about 1,400 BP-branded service stations throughout Australia. Of these sites, BP controls 347. This includes 316 of BP’s own network of sites referred to by BP as “company-owned-and-company-operated” and 31 “commission agency” sites. Additionally, BP sets the price of diesel only at a further 34 “diesel commission agency” sites. At the remaining BP-branded sites, prices are set independently by third-party site operators.

Woolworths Limited currently operates 531 sites and has 12 sites in development. Woolworths entered fuel retailing in the late 1990s, establishing service stations that offer fuel discounts to those buying groceries at its stores. In August 2003, Woolworths entered into an alliance with Caltex to operate dual-branded service stations, which are operated by Woolworths and obtain all fuels from Caltex.

The ACCC began a public review of the proposed acquisition in March 2017 and a statement of issues outlining preliminary competition concerns in August. The ACCC will release its final determination on the applications for authorisation by December 15, 2017.