While the supermarkets are being scrutinised for anti-competitive practices by farmers for cutting prices on products like milk and more recently fruit and vegetables, the Australian Association of Convenience Stores (AACS) has highlighted these practices also exist in petrol discounting.
According to AACS, the supermarkets are offering as much as 30 cents per litre off petrol if customers purchase alcohol from their liquor outlets.
AACS executive director Jeff Rogut said the dominance of the two major supermarket chains across many different product categories – not only alcohol and petrol – is having a marked anti-competitive impact on the nature of Australia’s retail industry.
“The smaller, independent retailer is being hung out to dry. These chains have the cross-channel market share to sell petrol at a loss and offset this loss against other product categories, at the same time driving independent service station operators out of business,” he said.
“Fuel is already an extremely low margin product and in the environment of higher utility costs, reduced tobacco sales and the forthcoming introduction of the carbon tax, independent retailers are finding it increasingly difficult to compete.
“The deck has been stacked in favour of the major chains and measures to level the playing field for retailers in this country are yet to receive due consideration at a legislative level.”
The AACS said the supermarket duopoly increased their combined market share of packaged alcohol sales to over 58 per cent of industry revenue according to the IBISWorld Industry Report: Liquor Retailing in Australia July 2011, with expansion plans for liquor outlets on the agenda of both chains.
“On the one hand we have new liquor licences being regularly granted to the major supermarket chains on a national basis, yet convenience stores remain unable to access this multi-billion market due to a regulatory anomaly,” he said.
“The convenience industry in North America, South East Asia and Europe sells packaged alcohol products and it has proven an important product category from a revenue perspective. It is unfair that Australian convenience stores are unable to share in this market, particularly given the difficulty independent retailers have in competing with the duopoly.”