ACCC to block Woolies, BP fuel deal
THE consumer watchdog has delivered a massive blow to Woolworths' proposed billion dollar fuel deal with BP Australia, announcing it will oppose the takeover.
The Australian Competition and Consumer Commission (ACCC) said this morning it will block the acquisition by BP Australia of Woolworths' service stations after a lengthy nine month review.
According to the ACCC, fuel prices would increase at the hundreds of Woolworths sites if BP took over, which would also lessen competitive pressure on other retailers in the market.
"Woolworths is a vigorous and effective competitor which has an important influence on fuel prices and price cycles in many markets throughout the country," ACCC chairman Rod Sims said.
"Many consumers seeking out cheaper petrol will head to Woolworths petrol stations.
"BP prices are significantly higher on average than Woolworths prices in the major capital cities.
"We believe that fuel prices will likely increase at the Woolworths sites if BP acquires them and other retailers would then face less competitive pressure.
"The bottom line is that we consider motorists will end up paying more, regardless of where they buy fuel, if this acquisition goes ahead."
The proposed $1.8 billion plan for Woolworths to sell its petrol stations has been drawn out for more than a year.
Woolworths currently operates 531 sites and has 12 sites in development.
BP supplies fuel to approximately 1,400 BP-branded service stations throughout Australia, setting fuel prices at roughly 350 of them.