ACCC rejects BP’s acquisition proposal of Woolworths service stations | Finance News Network

ACCC rejects BP’s acquisition proposal of Woolworths service stations

Company News

by Kathy Skantzos

Australia’s consumer watchdog announced it will oppose BP Australia’s proposed acquisition of Woolworths’ (ASX:WOW) network of more than 500 retail service stations, due to concerns that motorists would end up paying more.

Woolworths retaliated against the announcement this morning by saying it is disappointed with the ACCC’s decision after working closely with BP and the ACCC over many months this year.

ACCC Chairman Rod Sims said the acquisition will likely substantially lessen competition in the retail fuel market and would have an affect on metropolitan price cycles including fuel price hikes.

BP has higher prices on average, generally increases prices faster and is slower to make discounts compared to Woolworths, according to the ACCC.

If the acquisition goes ahead, the retailers must limit shopper docket and loyalty scheme discounts to no more than 4 per cent per litre and Woolworths would not be permitted to fund more than 2 cents of the 4 cent discount,

Shares in Woolworths (ASX:WOW) closed 0.49 per cent lower to $1.02.
 

Kathy Skantzos

Finance News Network
Kathy presents the Market Outlook and ASX company news. She joined FNN in September 2017. She has been in print and online journalism for over 9 years. She also worked in corporate communications.