Australian Shopper Fuel Discounts And The Free Market

I believe it's quite early in the US right now but the nightly news was on just a few hours ago here in Australia. For the last few nights it seems they've been running a story about how our larger supermarket chains are offering fuel discounts to shoppers and making it hard for the smaller businesses to compete with their fuel prices. I tried not to, but I couldn't help but make a thread on this topic. Source: ACCC chief Rod Sims airs concerns about petrol discounts from Coles and Woolworths supermarkets

We call gas petrol in Australia in case you're wondering, hence my use of the word fuel. The ACCC is the Australian Competition and Consumer Commission, they basically monitor businesses to make sure no one is playing dirty tricks to get an unfair business advantage over their competitors. They essentially try to enforce a fair playing field where all businesses are on equal ground and must abide by the same rules. And I don't think there's anything wrong with that.

But now they are basically saying that Woolworths and Coles shouldn't be allowed to give their customers a discount on fuel prices because it's unfair to the other smaller businesses... I mean do these people even know the meaning of business competition. I can understand the idea of not wanting these super conglomerates to force everyone else out of business, but I'm afraid I must side with them on this.

"If Coles and Woolworths wish to offer their customers a discount, it should be off supermarket products, not petrol," Mr Sims said.

ACCC's Rod Sims gives Woolworths and Coles a rocket over petrol shopper dockets

What I want to know is why is it perfectly fine to offer discounts on food but not fuel... would the small supermarkets not have trouble competing with Woolworths and Coles if they offered such discounts on their food? Why is it ok for them to offer cheaper food but not cheaper fuel? Why is it so important that all businesses charge a similar price for their fuel, and what is the motive behind that?

The ACCC admits they can't do anything about it, but now they are pushing for greater powers so that they can do something about it. That sounds like something directly out of Atlas Shrugged if you ask me. How can you justify it, these businesses are offering lower prices for the exact same item after all. If the other businesses want to survive then they simply must innovate and do what it takes to survive.

If they have to rely on the government to swoop in and save them then they don't deserve to be in business because they don't have what it takes to make it in the highly competitive business world. They could try lowering their fuel prices to a reasonable level for one thing, it's obvious most of them markup the price as much as they possibly can anyway, so they can handle a little reduction.

Or perhaps they could try offering discounts in their own fuel prices for people who spend at their businesses. I mean maybe I am over simplifying this a bit, and maybe it's not that easy to fight against these large chains, but I think the principle of what I'm saying is solid. We must ask ourselves why these super conglomerates exist in the first place. Is it really because of free market competition, or because of lobbyists and unfair regulations?

The local chain market here offers that and we get up to 50 60 cents off a fill up. Just recently I saw they opened their own service station. Cheapest gas(petrol) around. I can usually get my gas for 3 bucks a gal. Unfortunately I owe to much everywhere else to enjoy that little bit of extra cash.

I feel more like since they all know that most of us shop at either coles or woolies to do our groceries and get the 4 to 8c off dockets, that they push for these huge 45c off ones as an excuse to jack the petrol price up. Like the frog in slow boiling water, we wont notice it as the discounts on the fuel dockets will keep getting higher, pulling in more shoppers etc etc.

Just watching "The Project" on TV and they showed a survey on this topic where 71% of participants thought that it was a bad thing because it squeezed out smaller business competition. That's an example of how powerful the MSM can be at manipulating opinions. I guarantee it would be much lower than 71% if the survey was conducted a week ago.

They're in cahoots, I tells ya!

In some regional areas the independent grocers (I.G.A) have been forced out of business by Coles and Woolworths, which is completely against what the ACCC stands for, but yet they haven't lifted a finger to change things. And what happened to the ACCC toughening up on elevated fuel prices during holiday season? They were supposed to fix that years ago.

And It doesn't stop there. Many home grown dairy farms and beef producers are being left out of pocket as well. Both Coles and Woolworths are paying farmers a pittance, and the farmers are the ones who suffer while these retailers reap the benefits.

Woolworths posted a 60 billion dollar profit last financial year. But yet Suicide rates in farming communities is the highest in the country, because they can't make ends meet. Go figure.

Regardless of the argument. There is no discount or free lunch. At the end of the day you are paying more for your groceries, and the supermarket is not giving away nothing. I don't know what it is with people and petrol, I know of people who will drive many killometers to save $0.2 cents a litre, surely they use ten times the saving just to get there? Then people complain about the price of petrol , at the moment around a dollar sixty a litre here in Queensland Australia. They complain about a dollar sixty a litre for fuel , then they happily spend two to Three dollars on bottled water and smile. What ? they pay more for a free God given commodity and are happy ? There is something fundamentally wrong with this World ! Bottled water, EVEIN = NIEVE.

reply to post by 13th Zodiac

Regardless of the argument. There is no discount or free lunch. At the end of the day you are paying more for your groceries, and the supermarket is not giving away nothing.

What nonsense. Where I live Coles and Woolworths have the cheapest grocery prices compared to any other supermarket in the area. They are a bit like Walmart, they have cheaper prices but the quality often is isn't as good. But for people who can't afford the higher quality stuff from the smaller stores Coless and Woolworths are a good option. A lot of people shop at Coles and Woolworths for a reason... they aren't stupid and they are acutely aware of their spending budget, hence the reason why they seek out the cheapest prices. The reason why they are able to offer discounts on fuel is because the discounts help generate more sales from shoppers and therefore they get more profit. That is what makes up the difference, it's not rocket science and they don't do it by having higher prices, because they clearly do not have higher prices.

A mate of mines family owns a petrol station/garage.
Basically they dont make any money off petrol as it is so offering any discounts would mean they would be paying part of your bill and not making a profit.

Right now Coles and Woolies have competition so its in their best interests to be competitive, do you think it will still be the case when its just them?

As Aussies we can choose to go the path of America and when making purchases think of how we can save a few cents and eventually have everything in OZ owned by 1 or 2 companies.
OR
We can be less selfish and pay a little more for our purchases but actually support our economy by putting money in the hands of business owners instead of multinationals and shareholders.

Petrol...supermarket chains
Home hardware...supermarket chains
Liquor...supermarket chains
Officeworks...supermarket chains
Dick Smith...supermarket chains
400 odd hotels...supermarket chains
15.000 poker machines...supermarket chains
Groceries...supermarket chains
Fruit and vegetables...supermarket chains

If anyone really thought they were getting anything for free...

Å99

I`ll always support and shop almost anywhere other than Coles and Woollies these two are trying to control and squeeze out smaller business`s and screwing over farmers as they have done for years. Buying Aussie made is hard enough nowadays as well with the misleading labelling but by allowing these outlets rule we`ll only ruin our farmers and producers and have to rely on inferior imported product from overseas, then watch them jack up those prices on us when there are no alternatives.

I also know how hard it is for a petrol station owner to make a bob as it is without letting those two outlets control that area as well.

reply to post by IkNOwSTuff

A mate of mines family owns a petrol station/garage.
Basically they dont make any money off petrol as it is so offering any discounts would mean they would be paying part of your bill and not making a profit.

Well based on the fact that the prices can differ as much as 5c just between different towns only a few kilometers apart, I have a hard time believing that. And even if that's true, does it really justify the extreme act of stopping Woolworths and Coles from offering discounts on fuel? Does that not seem like a complete overstretch of governmental powers to you?

As Aussies we can choose to go the path of America and when making purchases think of how we can save a few cents and eventually have everything in OZ owned by 1 or 2 companies.
OR
We can be less selfish and pay a little more for our purchases but actually support our economy by putting money in the hands of business owners instead of multinationals and shareholders.

I'm not at all saying people should shop at the big chains and not the smaller local businesses. I regularly promote local shopping and post about the benefits of it on ATS. What I'm saying is simply that the government shouldn't have the ability to stop what is a perfectly normal business practice. We all want to blame the big chains but we must also be willing to accept a bit of the responsibility as shoppers. Like you said, if we want to take power away from the large chains then we should make a conscious effort to shop at local small businesses. We can't expect the government to put unfair restrictions on the large chains just because they are doing so well... the path to hell is paved with good intentions, remember that.

reply to post by ChaoticOrder


I think the profit on a litre of petrol is about 3c to the petrol station, $1 profit per customer give or take.

Petrol stations like Shell, Caltex and BP arent really paying for petrol as the companies are also refiners, any price increase is irrelevant and its just money being pushed from 1 division of the company to another, meaning they effectively have the petrol on consignment. Its not the same for independants.

It seems like you and me are on the same page but Im sensing some "I dont care if its wrong, I want my cheap petrol" *said with crossed arms and droopy bottom lip*

This is exactly the sort of thing the gov should step in on. Its basically turned someone like yourself who understands basic economics and how the world works and made them upset about losing a few cents a litre while ignoring the fact eventually this sort of thing will cost us all a hell of lot more

reply to post by IkNOwSTuff

It seems like you and me are on the same page but Im sensing some "I dont care if its wrong, I want my cheap petrol" *said with crossed arms and droopy bottom lip*

Funny, but I don't actually drive so I never really need to buy petrol.

This is exactly the sort of thing the gov should step in on. Its basically turned someone like yourself who understands basic economics and how the world works and made them upset about losing a few cents a litre while ignoring the fact eventually this sort of thing will cost us all a hell of lot more

How is this exactly the sort of thing the government should step on... this is the foundation of the free market. It's the principle man, the principle. The government should simply not be able to tell a business what it can discount and what it cannot. They start by telling the large businesses how to set their prices, and then what next? We all know it always starts as a small thing which seems like a good thing at the time, and then they slowly expand on those powers and abuse them. If you give them one inch on this you set a precedent that the government can just go around dictating prices and totally undermine the fee market. We are in this mess to begin with because the government doesn't know how to stop messing with the free market.

reply to post by ChaoticOrder


i think you are wrong on this one mate.

Originally posted by bellagirl
reply to post by ChaoticOrder

 

i think you are wrong on this one mate.

You are welcome to think that but it would be appreciated if you could explain why you think I'm wrong and why the government should be able to dictate how businesses set their prices.

a reply to: ChaoticOrder

But now they are basically saying that Woolworths and Coles shouldn't be allowed to give their customers a discount on fuel prices because it's unfair to the other smaller businesses... I mean do these people even know the meaning of business competition. I can understand the idea of not wanting these super conglomerates to force everyone else out of business, but I'm afraid I must side with them on this.

Those Corporations wouldnt be where they are in Australia today without government welfare, woolies and coles very much the beneficiaries of crony capitalism. Would Mz Rand really support that maybe she would but who cares about her not me! This was never about fair playing field for competition in first place you are trying to turn the scale upside down.
Attitudes like yours are the reason crony capitalism went global it will only get worse and go from monopolies to duopolies to oligopolies because pple whom do not wish to support local business no wonder why we are in the state we are in.

originally posted by: 74joff
a reply to: ChaoticOrder

But now they are basically saying that Woolworths and Coles shouldn't be allowed to give their customers a discount on fuel prices because it's unfair to the other smaller businesses... I mean do these people even know the meaning of business competition. I can understand the idea of not wanting these super conglomerates to force everyone else out of business, but I'm afraid I must side with them on this.

Those Corporations wouldnt be where they are in Australia today without government welfare, woolies and coles very much the beneficiaries of crony capitalism. Would Mz Rand really support that maybe she would but who cares about her not me! This was never about fair playing field for competition in first place you are trying to turn the scale upside down.
Attitudes like yours are the reason crony capitalism went global it will only get worse and go from monopolies to duopolies to oligopolies because pple whom do not wish to support local business no wonder why we are in the state we are in.

couldn't of said it better local corner shops are disappearing rapidly.. I try to support these businesses as much as possible..