ACCC Energy Deal To Benefit Bunnings, Costco, Officeworks
The ACCC has issued a draft determination permitting selected Large Format Retail Association (LFRA) members to jointly tender and negotiate cheaper electricity power prices – benefiting Officeworks, IKEA, Bunnings and Costco.
The Large Formal Retail Association (LFRA) boasts over 125 retail brands and associate members, and claims to be the ‘peak industry body’ for ‘Big Box’ retailers in Australia.
The proposed joint tendering process currently involves 41 members, with ACCC authorisation required to allow collective bidding among retail rivals – normally a breach of the Competition and Consumer Act.
The ACCC has granted interim authorisation for LFRA members to commence initial stages of tendering and negotiation as the regulator completes its assessment.
“Collectively tendering is also likely to save the retailers time and money compared to individual negotiations for electricity supply,” claims ACCC Commissioner, Stephen Ridgeway.
“LFRA and its members want to jointly tender so they can pay less for their electricity”
“We propose to allow this joint tendering because we expect it will lead to more competition between suppliers for the group’s combined electricity demand.”
The consumer watchdog asserts it’s unlikely the deal will cause “significant public detriments”, noting participating members aggregate demand is a very small proportion of total electricity consumption of electricity in each State and Territory.
‘Big Box’ retailers usually occupy a large physical footprint, with a large product selection often sold in bulk.
The ACCC’s authorisation would also allow the LFRA to add future new members, provided total demand of the group does not exceed 1% of the annual consumption of selectivity in any state/territory.