On 25 February 2014, the ACCC instituted proceedings against Woolworths and Coles in respect of fuel discount offers made by them. The ACCC alleged that the offers were in breach of an undertaking Coles and Woolworths had each given the ACCC under s87B of the Competition and Consumer Act 2010 (Cth) (CCA) in December 2013 (Undertaking). Under the Undertaking, each of Woolworths and Coles undertook that it would not make any offer which allowed a person to receive a discount of petrol, diesel or LPG where:
- the fuel discounts are funded by any division or subsidiary of Woolworths/Coles (other than the petrol division); or
- the discounts are for more than 4 cents per litre and are “contingent on the past or future acquisition of other goods and services.”
On 14 April 2014, the Federal Court determined that Woolworths had breached its Undertaking by making an offer which afforded customers 8 cents per litre off fuel (a customer was entitled to a 4 cent discount on fuel where they had spent at least $30 at Woolworths and an additional 4 cents if they spent a minimum of $5 at the petrol station store). The Court found that the offer breached the Undertaking as it could not be characterised as two separate offers given the entire discount was only attainable by using both offers in a single transaction. The Court also held that, as a matter of substance, the relevant contingent purchase was not the petrol station store spend of $5 but the initial Woolworths qualifying purchase, and as such no exception to the Undertaking applied.
The Court, however, dismissed the ACCC’s additional claims against other fuel discount offers made by Woolworths and Coles, on the basis that those offers were only partially contingent on a customer making a qualifying purchase in a supermarket and the contingent proportion of the discount was not more than 4 cents.