For those of us concerned about competition and consumer law issues there comes a time when the case for action is so overwhelming that we need to the ACCC to stop “watching” and to act decisively in the consumer interest.

Fuel prices: a crucial part of the consumer economy. Artwork by Warren Brown of The Daily Telegraph

In the petrol industry that time has come.

On this occasion it’s the urgent need for the ACCC to block Caltex’s proposed acquisition of Mobil service stations.

Why the urgency? Well, that’s because the ACCC yesterday released its so-called “Statement of Issues” concerning Caltex’s proposed acquisition of 302 Mobil service stations.

That ACCC Statement of Issues confirms for all to see that the competition concerns surrounding the proposed Caltex acquisition are so large and so wide-ranging that the ACCC would have the ability under our competition law - the Trade Practices Act - to stop the acquisition.

The ACCC presents a very compelling case that the Caltex acquisition is likely to substantially lessen competition in a number of key petrol, diesel and LPG markets.

A finding that an acquisition is likely to substantially lessen competition has very serious legal ramifications as such a finding would represent a breach of s 50 of the Trade Practices Act and would empower the ACCC to block the acquisition.

Statements from the ACCC that it has formed the preliminary view that the Caltex acquisition is likely to have the effect of substantially lessening of competition in markets for the wholesale supply and distribution of petrol and diesel in NSW and Queensland is of deep concern to motorists.

Of similar concern to motorists is the ACCC’s indication that the Caltex acquisition may also raise competition concerns in wholesale petrol and diesel markets in Victoria and South Australia.

The ACCC goes further and expresses concerns that the Caltex acquisition is likely to significantly increase Caltex’s ability to raise wholesale petrol and diesel prices, which in turn would allow Caltex to push up retail petrol and diesel prices.

Finally, the ACCC’s concerns at the wholesale level are backed up by additional strong concerns regarding the acquisition’s potentially adverse impact on specific local retail markets.

Of particular concern to motorists is the fact that the ACCC went so far as to identify dozens of particular locations where the Caltex acquisition of Mobil service stations could substantially lessen competition in local petrol, diesel and LPG markets.

When taken together, the ACCC’s preliminary findings are sufficiently compelling for the ACCC to seek a court injunction to stop Caltex’s acquisition of the Mobil service stations.

Clearly, the Caltex acquisition of Mobil service stations represents a very real and substantial threat to oil industry competition in major Australian wholesale and retail markets and must be stopped by the ACCC in the interests of motorists.

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3 comments

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    • stephen says:

      02:27pm | 04/09/09

      Buy a bicycle.

    • I Tarbell says:

      06:28pm | 04/09/09

      If the ACCC conclude that the Caltex acquisition of Mobil service stations represents “a very real and substantial threat to oil industry competition”, the ACCC MUST act to stop this anti-competitive merger in the interests of consumers.

      In recent years the ACCC have developed a shameful record of putting the interests of big business ahead of those of consumers, and the reputation of this once proud organisation currently lies in tatters.

      The proposed Caltex acquisition of Mobil service stations presents perhaps the last chance for the ACCC to start to claw back their shattered creditability.

      The ACCC cannot continue to watch and apologize and bury their head in the sand as competition continues to collapse around their ears.

      When the facts are so crystal clear the Caltex acquisition of Mobil service stations is AGAINST the interest of consumers,  if the ACCC fail yet again to act to protect the interests of consumers, this will be the final confirmation that the ACCC are mere stooges for the vested interests of the big end of town – and the Minister will have no alternative other than cleaning out the entire organisation, lock stock ,and barrel -  starting from the top.

    • amplion says:

      08:15am | 07/09/09

      It’s not just whether ACCC thinks the Caltex acquisition might be a threat.  It’s a real world question about (bigger) monopolies being created and the effect that will have on us as consumers.

      The record of ACCC, particularly in relation to the fuel corporations, seems indifferent at best.  There is NO reason for so-called weekly cycles in fuel prices (other than an apparent desire by the companies to keep customers confused and maximise their profits), but this weekly farce seems to enjoy the beaming approval of the ACCC.

      The fuel corporations have substantial interests in distribution companies and service stations, and this alignment may also call for some effective investigation, particularly in non-metro areas where all fuel prices rise and rise in what must surely be a truly remarkable coincidence of unity, since all concerned deny any suggestion of collusion.

 

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