Supermarket fuel discounts face axe

THE competition regulator has warned the major supermarket chains it plans to tear up their 8c-a-litre shopper docket petrol discounts.

Australian Competition and Consumer Commission chairman Rod Sims says if Woolworths and Coles want to help shoppers with lower prices, they should stick to groceries instead of subsidising fuel.

Answering questions from News Ltd, Mr Sims said the chains were affecting the "competitive process".

In 2007, an ACCC petrol inquiry concluded shopper dockets benefited consumers and promoted competition, but at the time, the discounts were not as sizeable or as sustained. Late last year the News Ltd revealed the ACCC was examining Coles' decision to extend its 8c-a-litre petrol discount until April - a move Woolworths matched in January.

Yesterday, Mr Sims said: "It's only now that you've got shopper dockets being offered for 8c over a five-month period. The size and extent of these (discounts) have been going up and up and up. "If they continue like this ... how do these people (the competitors) survive?"

Those competitors have told the ACCC - off the record - they are in strife.

"It's all confidential, but the crescendo of concern from the retailers is massive," Mr Sims said.

"If the supermarkets want to discount their products to get people in the door that's fine, lower the price of the goods in the supermarket.

"What they're doing is taking the supermarket profits and lowering the price of their petrol when they are competing with other people.

"So we're not against discounts, but when you take your profits from one sector and have massive discounts in another sector, then it does have an effect on the competitive process and that's what we're here to protect."

A spokeswoman for Woolworths said: "Woolworths aims to be the most competitive in the market on all items across the supermarket. Petrol discounting is offered as a reward to our customers."

A Coles spokesman said: "Fuel docket discounts are just one of a number of promotional tools we choose to invest in to provide value to our customers. `Spend and get' promotions linked to fuel are commonplace around Australia and operated by a number of fuel retailers."

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