Aussie watchdog cracking down on drip pricing but kiwi regulators quite happy

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webwat

1990 posts

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# 992390 22-Feb-2014 16:49

Its a different situation in NZ though. Supermarkets for the most part don't own Petrol Stations (excluding a few Pak n Save's which have a BP supplied outlet on site). Other retailers can compete with discounted fuel offerings through the AA Smart Fuel system (which is free for consumers to join and includes discounts at select petrol stations with no purchase required other than the fuel). Sounds pretty fair to me.

The biggest fuel discount I got so far was 6c. But is it anticompetitive for New World to offer flybuys since Z are the only petrol retailer to accept it (since they own it). I usually avoid Countdown no matter what discounts they have, I think they are anti-competitive and can't help themselves. I especially don't like the way the run competing countdowns close to each other or use the Resource Management Act to prevent Foodtuffs developing a perfectly good site. We have basically setup the RMA for supermarket chains to use against each other so its our own fault for not fixing the law.

Qualified in business, certified in fibre, stuck in copper, have to keep going ^_^

jpoc

855 posts

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# 992406 22-Feb-2014 17:11

I cannot see that the situation with fuel discounts in NZ is anti-competitive as far as the supermarkets are concerned.

We have two players and they can both offer discounts.

If there was a new entrant, then they could launch their own scheme or tie in with AA Smartfuel.

It is anti-competitive in a big way in the fuel business itself.

100% of my fuel spend is with Pak'nSave with a minimum 6c discount and 80-90% of that spend is on a discount of 20-50c a litre. A retailer who is not able to gain entry to one of the big fuel discount schemes might be able to scrap over the small proportion of my fuel spend that qualifies for my supermarket's 6c discount but the rest of my business is utterly out of their reach. That is anti-competitive but the remedy would surely be to try to open up the fuel discount schemes to all fuel retailers rather than to ban them.

old3eyes

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# 992409 22-Feb-2014 17:15

kingjj:
sbiddle:
JimmyH: I also can't quite see why you regard the furl discounts as anti-competitive?

It seems just like offering any other product as a marketing strategy - spend over $200 and get a free purple eggbeater or whatever?

They are anti competitive because they skew the market and by effectively cross subsidising a product when other retailers are unable to do so.

It needs to be made clear here what the role of a competition regulator is - it is not to give customers the best deal, it's to ensure that healthy competition can exist in a marketplace.

In Aussie things are slightly different to NZ because both Woolworths and Coles own petrol stations. The discounts they were offering which were subsidised by a different business unit (the supermarket) create an uneven marketplace and lessen competition.

40c discounts here are ridiculous - out of that probably 38c of it is paid for by supermarkets out of marketing spend. That's a massive customer acquisition cost.

Its a different situation in NZ though. Supermarkets for the most part don't own Petrol Stations (excluding a few Pak n Save's which have a BP supplied outlet on site). Other retailers can compete with discounted fuel offerings through the AA Smart Fuel system (which is free for consumers to join and includes discounts at select petrol stations with no purchase required other than the fuel). Sounds pretty fair to me.

Mobile now.

Regards,

Old3eyes

jpoc

855 posts

Ultimate Geek

# 992414 22-Feb-2014 17:21

webwat:

Its a different situation in NZ though. Supermarkets for the most part don't own Petrol Stations (excluding a few Pak n Save's which have a BP supplied outlet on site). Other retailers can compete with discounted fuel offerings through the AA Smart Fuel system (which is free for consumers to join and includes discounts at select petrol stations with no purchase required other than the fuel). Sounds pretty fair to me.

The biggest fuel discount I got so far was 6c. But is it anticompetitive for New World to offer flybuys since Z are the only petrol retailer to accept it (since they own it). I usually avoid Countdown no matter what discounts they have, I think they are anti-competitive and can't help themselves. I especially don't like the way the run competing countdowns close to each other or use the Resource Management Act to prevent Foodtuffs developing a perfectly good site. We have basically setup the RMA for supermarket chains to use against each other so its our own fault for not fixing the law.

Sounds like my local. Two Countdowns in the Glenfield Mall and a Pak'nSave down the hill that only opened after a spurious RMA action by Countdown was finally quashed.

As a result, all that I buy from Countdown is stuff that I cannot get from Pak'nSave - Habanjero Tabasco, Quilton toilet tissue, Home Brand kitchen rolls and fresh Habanjero chillies. I have commented before on the conversations that I have with Countdown checkout staff.

surfisup1000

4324 posts

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# 992440 22-Feb-2014 17:34

mattwnz:
sbiddle: Our Commerce Commission is inept. 'nuff said

They don't seem interested in doing anything about large supermarket fuel discounts, something that's not banned in AU because it's anti competitive.

Add on our building sector which lacks competition, and means people pay far to much for houses, and don't have the money to spend in the economy on other things. It is almost as though the government need to setup competing companies due to competition problems in NZ, like they did with banking. I see there ire several high profile calls for a government run supermarket now. I am not sure if it is die to a lack of resources by the cc or not, but it shouldn't be.

I've a friend who is a builder and the kickbacks are amazing!!! Put your business through certain companies and the builder gets overseas trips, ipads , and the like. At least, that is what he has had in the last couple of years.

Geektastic

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# 992443 22-Feb-2014 17:41

On the subject of fuel discounts one wonders just how much extra we are paying for the groceries to cover it...

jpoc

855 posts

Ultimate Geek

# 992466 22-Feb-2014 17:56

Geektastic: On the subject of fuel discounts one wonders just how much extra we are paying for the groceries to cover it...

Some quick sums suggest nothing.

How so?

For me, a trip to Pak'nSave usually costs around $200 and about one in ten trips will get me a big discount which may save me $30. So, a $30 saving on $2000 of shopping is 1.5%.

Now, most items in the shop cost something like $x.y9. Suppose that the shop had a 1.5% drop in overheads because they no longer offered fuel discounts. Do you seriously imagine that your block of cheese would drop from 7.99 to 7.91? I doubt that 1.5% is enough to impact retail prices and I expect that 1.5% is at the high end of the range for the cost of these discounts because few people will get maximum use from the available discounts.

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