Yesterday, new laws came into force in New South Wales to control the way petrol prices are advertised on resellers price boards. It will no longer be lawful to advertise the price that will be charged when a petrol discount docket is offered. The only price a reseller may display is the price that is available to all motorists.
Many people complain that the previous sign boards were misleading. They often carried several prices in big letters and needed careful study to understand what conditions applied.
The number of independent petrol stations has been declining and there is a risk that petrol can become a duopoly unless we can establish a more level playing field. Fair Trading is threatening to police the new rules stringently and infringement fines run to $ 22,000 for an individual or $ 110,000 for a corporation.
This whole question of " shopper dockets " needs a rethink. On the one hand, discounting is a normal facet of retail trading. Just about every store on the planet carries signs advertising a " Sale " from time to time and " mark down " prices help stores to move end of season stock. It is therefore quite legitimate to discount petrol as a normal extension of that trading technique.
The sticking point comes when the item discounted is one of life's essentials and the method of obtaining that discount is not available to other competitors. In this case, the retailer is able to off-set the " loss " on petrol sales by increasing the margin on items the customer must purchase - to qualify for the petrol discount.
Fair trading laws bar conglomerates from using their combined muscle to drive competitors out of business. Several years ago, glaring cases emerged where merchandise was being consistently offered way below cost to undersell nearby competitors and drive them to close down. It was a deliberate and blatant attempt to create a trading monopoly in some shopping centres and a Fair Trading approach caused it to cease.
It seems that a similar excess is starting to appear in the petrol price wars. We are seeing a discount of forty-five cents a litre being offered and that far exceeds the margin available to any normal reseller of petroleum products. If a product is being sold at a deliberate loss - to make it imperative for shoppers to gain the means of running their cars - it can also be implied that the tactic is designed to damage competition.
It seems that ending the " below cost " tactics to disadvantage competing butchers and greengrocers in main shopping centres was the result of Fair Trading reaching an " understanding " with the major players - with the threat of legislation unless sanity prevailed.
A similar " understanding " needs to be reached on the extent of petrol discounting, before the duopoly becomes too big and powerful to be reigned in without a major legislative war that would be damaging to all the parties concerned.
Perhaps this balancing on advertising signs is a shot in the first salvo !
No comments:
Post a Comment