Australian watchdog blocks BP buy of Woolworths fuel business
The Australian Competition and Consumer Commission (ACCC) has announced that it intends to oppose the proposed acquisition by BP Australia Pty Ltd of Woolworths Limited’s network of retail service station sites.
Woolworths currently operates 531 sites and has 12 sites in development. BP supplies fuel to approximately 1,400 BP-branded service stations throughout Australia, setting fuel prices at roughly 350 of them.
“We consider that BP acquiring Woolworths’ service stations will be likely to substantially lessen competition in the retail supply of fuel,” ACCC Chairman Rod Sims said.
The ACCC considers Woolworths has positive influence as a competitor on the fuels market as it traditionally offers cheaper fuel than other retailers – including BP – and its exit would make the market less competitive.
“We believe that fuel prices will likely increase at the Woolworths sites if BP acquires them and other retailers would then face less competitive pressure. The bottom line is that we consider motorists will end up paying more, regardless of where they buy fuel, if this acquisition goes ahead,” added the ACCC.
In light of recent events, BP is said to be disappointed with the decision from the ACCC and will be looking a legal steps to challenge the decision.
The agreement over the sale of Woolworths’ fuel business to BP was announced on December 2016 for AUS$1.8 billion ($1.3 billion).
