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| Petrol discount schemes ‘uncompetitive’ |
   
Posted Date: 02/02/2012
By Inside Retail
Deals offering fuel discounts for liquor purchases have come under attack.
Recent promotions by supermarket chains offering as much as 30 cents a litre in fuel discounts for buying alcohol at sister liquor chains highlights an “unfair advantage” big retailers have over smaller players, advocates the convenience stores industry.
“To reward bulk alcohol purchases with petrol discounts seems an absurd concept, however more alarming is the fact that, by permitting this practice, the regulators are enabling the two major chains to strengthen their already unfair market share on two product channels simultaneously,” said Australasian Association of Convenience Stores executive director Jeff Rogut.
He says the dominance of the two major supermarket chains across many different product categories – not only alcohol and petrol – is having a marked anti-competitive impact on the nature of Australia’s retail industry.
“The smaller, independent retailer is being hung out to dry. These chains have the cross-channel market share to sell petrol at a loss and offset this loss against other product categories, at the same time driving independent service station operators out of business,” said Rogut.
“Fuel is already an extremely low margin product and in the environment of higher utility costs, reduced tobacco sales and the forthcoming introduction of the carbon tax, independent retailers are finding it increasingly difficult to compete.
“The deck has been stacked in favour of the major chains and measures to level the playing field for retailers in this country are yet to receive due consideration at a legislative level,” he said.
The AACS has called on government to demonstrate support for convenience store operators by allowing them to take on new product categories, including packaged alcohol, in an attempt to stem the flow of market share even further toward the major chains.
The supermarket duopoly increased their combined market share of packaged alcohol sales to over 58 per cent of industry revenue according to the IbisWorld Industry Report: Liquor Retailing in Australia July 2011, with expansion plans for liquor outlets on the agenda of both chains.
“On the one hand we have new liquor licences being regularly granted to the major supermarket chains on a national basis, yet convenience stores remain unable to access this multi-billion market due to a regulatory anomaly,” Rogut said.
“The convenience industry in North America, South East Asia and Europe sells packaged alcohol products and it has proven an important product category from a revenue perspective. It is unfair that Australian convenience stores are unable to share in this market, particularly given the difficulty independent retailers have in competing with the duopoly,” he said.
The AACS is lobbying policy makers in an attempt to stem the flow of market share toward the major supermarket chains and protect the viability of the approximately 4500 convenience stores operating in Australia. |
Friday, February 03, 2012 by Domenic Greco
What is even more astounding is that tobacco purchases in Victoria also contribute to cheap fuel dockets. At this point it is still not illegal to provide free fuel for tobacco purchases although banned in other states. Coles have decided to stop this practice but Woolworths still continues to help contribute to the problems caused by smoking by offering free fuel with tobacco purchases..its about time the Victorian Government did something about this and help small businesses compete on a level field.
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