BP-Woolworths Deal ‘May Substantially Lessen Competition’
The ACCC has raised concerns that BP’s proposed acquisition of Woolworths’ service stations could lead to less competition and higher petrol prices.
BP announced the $1.8 billion deal in December last year which would see Woolworths service stations taken over and rebranded. The two companies would also partner on a new convenience store brand ‘[email protected]’ with plans to launch at least 200 sites.
Ahead of releasing its final decision on the acquisition on October 26, the ACCC is seeking feedback from interested parties, and has already received submissions from industry associations, fuel retailers and suppliers, and corporate and individual consumers.
“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,” said ACCC chairman Rod Sims.
Sims also said the ACCC was concerned BP would not follow the pricing strategy of Woolworths, which currently encourages competition by taking the lead with petrol price reductions and by reducing prices in response to other retailers.
In addition, the ACCC said it was analysing the effect of the “complex transaction” on the hundreds of local markets close to Woolworths service stations, and on competition and prices for convenience groceries.