A hidden agenda ?

There is a fine line between legitimate marketing plans to attract customers to improve sales results, and using unfair tactics to drive  competitors out of business to achieve monopoly status.   In the important food and grocery trade, two giant companies dominate and have a fast approaching eighty percent market share  Their ambitions have expanded and now they are dominating both the hardware market segment - and the supply of car fuels.

It is the use of petrol discounting that is causing the Australian  Competition and Consumer Commission ( ACCC ) to investigate the practice of giving discounts on petrol sales to customers who buy at least a $30 purchase in a single transaction at their stores.   In a worrying trend, the usual four cents per litre saving has been doubled to eight cents - and it seems likely to remain valid for extended periods of time.

That extended discount is a powerful incentive for car owners to shop exclusively for petrol at the company's petrol station chain.   The Holden Commodore has a seventy-one litre tank  and the discount delivers a $ 5.68 saving.

The problem is two-fold.   The two grocery companies are so big and powerful now that they are in a position to use bargaining muscle on the oil companies to gain preferential price supply, enabling them to offer discounts without hurting their bottom line - and the small and independent petrol resellers face competition they can not match - and their numbers dwindle to the point when a two brand petrol monopoly is a real threat to price stability.

The job of the ACCC is to maintain competition in the marketplace across the entire supply system and prevent the establishment of monopolies that can be used to unfairly impose price hikes.   This investigation will look at whether this discount scheme on petrol is intended to thin out the independents by making them uncompetitive - and if that is to the detriment of all those who buy petrol.

Cynics will not be holding their breath awaiting a verdict that delivers justice.   There have been many enquiries into the petrol pricing system and none have reached a logical conclusion.   The oil companies are just too big and powerful to be brought into line, and the two grocery chains have the fire power to make both Federal and state governments back off.

There have been promises to bring clarity into petrol pricing, but the present " price cycle " argument is little more than a joke.   Holiday peak demand always sees the price of petrol hike - and this Christmas break has delivered the usual result.  When the GFC hit some banks were judged " too big to fail ".   It seems that the oil companies are " too big to discipline " - and the grocery duopoly are fast reaching that same status.

The ACCC was brought into being with high expectations that it would have the teeth to create a fair market place.    It has won a number of small victories,  but when it comes to the big issues it seems to be a completely " toothless tiger ".

This investigation is taking on the big end of town.   An " inconclusive finding " is certain !