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The ACCC’s "statement of issues" includes the view is that the Caltex
acquisition of Mobil’s fuel business form ExxonMobil is likely to have
the effect of substantially lessening competition at both the wholesale
supply and distribution level as well as at the retail level.
At the wholesale level, the commission says the acquisition would
lift Caltex’s share of the NSW market from 46 per cent to 55 per cent,
its share of the Queensland market from 41 per cent to 46 per cent, its
share of the South Australian market from 34 per cent to 43 per cent
and its share of the Victorian market from 31 per cent to 38 per cent.
At the retail level, it says acquisition of 22 of the 302 sale sites
would be likely to substantially lessen competition and that there are
45 sites that may raise competition concerns.
The commission believes that because the acquisition would increase the
share of Caltex’s supply going to its own sites, making it more
vertically integrated and giving it more sites that compete with other
wholesale customers, there would be an incentive to raise the wholesale
prices it charges other retailers.
Caltex is the largest wholesale provider in each state and the
commission says its market inquiries indicated that non-integrated
retailers, particularly Caltex-branded independents and Woolworths,
would have limited alternatives because of the bundle of services –
fuel, brand and fuel cards – they acquire from Caltex.
With Shell not competing as a branded supplier because of its alliance
with Coles, BP would remain as an alternative but its own network might
limit the ability of an independent retailer to switch suppliers and
brands. Woolworths, because of the volumes it buys, would have limited
options for switching suppliers, a particularly concerning prospect for
the ACCC because it believes Woolworths on average offers the lowest
prices for petrol in the capital cities, excluding the impact of the
shopper docket scheme.
The ACCC, always cynical about the big petroleum companies and food
retailers, would also be concerned about the potential for the opposite
to occur – where the Mobil deal was used to strengthen the position of
the Caltex/Woolworths alliance relative to their competitors. The two
petrol/supermarket schemes are already the dominant forces in petrol
retailing.
Caltex has argued that acquiring the Mobil sites simply brings its
retail share into line with Coles and Woolworths and not much greater
than BP’s and that in any event, while it might supply and support the
Caltex-branded network, it would only set the prices for a fraction of
the sites. It argues the proposed deal would be pro-competitive, not
anti-competitive.
Associate Professor Frank Zumbo, a competition and consumer law expert
from the University of New South Wales, says some localities will be
left with little choice about which company to buy their petrol, LPG
and diesel from. Associate Professor Zumbo says the ACCC has
identified dozens of locations where Caltex's acquisition of Mobil
sites could substantially lesson competition.
He also says there will be wider price implications because Caltex owns
the Kurnell refinery in Sydney and the Lytton refinery in Brisbane, and
is a major supplier of wholesale petrol to other outlets, including
Woolworths.
The commission is now seeking feedback on the issues of concern from all interested parties.
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