Coles and Woolworths have been put on notice by the competition watchdog as it warned big shopper discounts on petrol could be in breach of the country's competition laws.
Australian Competition and Consumer Commission chairman Rod Sims, in a speech in which he also raised concerns about how the two big supermarket chains worked with their suppliers, said yesterday there were signs the harm to competition, consumers and other firms from shopper dockets could be "quite substantial".
The commission is close to releasing a report into shopper dockets which started offering discounts of 4.5 cents a litre through Coles and Woolworths-aligned service stations. But the discounts have grown, with Mr Sims pointing out that on some occasions the discounts have reached 45 cents a litre.
Mr Sims said while the ACCC did not have the power to ban the dockets, there were worrying signs about their prevalence.
"I am also concerned that despite placing retailers on notice about our concerns, the behaviour has continued and indeed escalated," he said in his address in Canberra.
"While they may provide short-term benefits to some consumers, the likely harm to competition and the competitive process, and therefore to other fuel retailers and other consumers, may be quite substantial."
Mr Sims also took aim at the two supermarket giants over their relationship with suppliers.
The watchdog will release a report early next year on claims the companies have engaged in "unconscionable conduct" in dealing with suppliers and whether they are discriminating in favour of their own house brand products.Woolworths and Coles are in the midst of a low-price guarantee battle that opened with $1 a litre milk two years ago. According to Mr Sims, some allegations have been made suggesting the major chains may have broken competition law. "We remain on track to conclude the investigation phase of key aspects of the investigations into the treatment of suppliers by the end of this year," he said.