Topics:  coles, fuel, nsw fair trading, petrol station, woolworths

Fuelled up for failure

Liberty service station on Gwydir Hwy is believed to be the last dealer-owned, dealer-operated petrol station in Grafton. Paul Kelly (pictured) is manager and son of owner Robert Cook.
Liberty service station on Gwydir Hwy is believed to be the last dealer-owned, dealer-operated petrol station in Grafton. Paul Kelly (pictured) is manager and son of owner Robert Cook. JoJo Newby

DODOS are not extinct yet but trading practices by major retailers have left only one in Grafton.

Robert Cook and his Liberty service station on the Gwydir Hwy is the last of Grafton's dealer-owned, dealer-operated (DODO) petrol stations and he blames Coles and Woolworths.

"Coles and Woolworths now have in excess of 50% of the volume of fuel sold in Australia," Mr Cook said.

"When you are dealing with oil companies, good credit is where you get load-to-load credit, meaning you have got 3-4 days credit to pay accounts, not 30-90 days like many businesses," he said.

"If Coles and Woolworths (owned petrol stations) shove prices down for just three or four weeks, that can be just enough to finish off somebody."

Mr Cook said the major retailers' deep pockets provided by their supermarket business gives them the ability to sustain losses on fuel margins for extended periods and force out competitors.

"Once you dominate the pricing situation and the supply situation you also become politically powerful," he said.

Chief executive of the combined Motor Traders and Service Station associations James McCall echoed Mr Cook's concerns.

"The Service Station Association had 600 members three years ago and half of those have dropped out of business," Mr McCall said.

"We believe Coles and Woolworths are artificially reducing prices of petrol in order to force out businesses."

Mr McCall described the cross-subsidisation of shopper-docket supermarket sales into the petrol retail sector as "scandalous" and "immoral," while other practices are misleading.

"We believe their pricing boards confuse the public by showing at the top of their board the price after a discount is applied," he said.

NSW Fair Trading Minister Anthony Roberts is understood to be reviewing allegations of misleading signage.

"We are calling on the Federal Government to grow a backbone on cross-subsidies or they will have no independent service stations and a loss of competition," he said.

"When that happens it is consumers who will be paying."

Cross subsidies are not the only retail practice Robert Cook condemned.

A new convert to the Liberty chain, his Gwydir Hwy service station was previously a Shell garage, the oil company affiliated with Coles.

"We used to take Shell Cards. I was told that given to a complaint from Coles that I was in close proximity to their Bent St site that my Shell Card facility would be removed," he said.

"A few months later someone turned up and took away the Shell Card facility and verbally told me that was the reason."

 

Woolworths responds

Both Woolworths and Coles were asked to respond to these claims and at the time of going to print, only Woolworths had supplied the below statements:

  • We make no apologies for bringing our customers good prices at the pump
  • Competition in the retail petrol market remains strong with many players, and independents make up 40% of the sector
  • Fuel retailing is a low- margin, high-cost business with the majority of the retail price taken up by the wholesale costs and taxes
  • The ACCC, at Senate estimates on February 15, stated their rigorous and detailed analysis had shown there was no relationship between discount docket promotions and the margin between retail and wholesale prices.


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