Gas Week

EWN Publishing

Shopper dockets a possible test case for the government’s controversial new predatory pricing laws: ACCC needs to issue guidelines

Posted by gasweek on 10 October, 2007

Shopper docket critics said the number of independents forced out of the market demonstrates purpose. And the 4c a litre reduction, often larger, could mean petrol being sold below cost.

Shell and Caltex early favourite: According to Allan Fels and Fred Brenchley, in The Australian Financial Review, (9/10/2007), p. 62, the hunt was on to find a test case for the government’s controversial new predatory pricing laws. Petrol shopper dockets operated by the big two supermarkets with Shell and Caltex are the early favourite.

“Birdsville amendments”: Independents also claim that the longer-term discounting comes from outlets tied to the supermarket chains. Of course, it would be far easier if a whistleblower came forward. While small business is taking heart from the new pricing laws, the big end of town is rightly aggrieved. The so-called “Birdsville amendments” throw entirely new concepts such as “market share” into already confused section 46 market power provisions of the Trade Practices Act.

Not what big business bargained for: They also abandon the test of predatory behaviour of harming competition for one of harming competitors. Almost all competition harms competitors. This is not what big business bargained for in the government’s bid to tidy up the act after the High Court threw out the ACCC’s Boral case. Sirens of big business claim the new rules will end discounting. That’s over the top, said Fels.

Ball firmly in the court of the ACCC:Like it or not, there’s an inconvenient truth involved. The predatory pricing provisions are now law, and neither side of politics will change them soon, no matter who wins the election. They will first have to be shown as not working. Which puts the ball firmly in the court of the ACCC. Regardless of whether it mounts an early case, the ACCC needs to issue guidelines on how it intends to interpret the predatory pricing rules. What’s its view on market share, sustained discount pricing and below cost? In short, in what discounting circumstances will the ACCC launch prosecutions? It has guidelines on just about every aspect of its role, so there is no precedent here. ACCC guidelines will also put an end to irrational fears that the new rules will end such normal discounting as Christmas/ new year sales” argued Fels.

The Australian Financial Review, 9/10/2007, p. 62

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