Woolworths breaks ground on new $135m distribution centre

Woolworths has commenced building works on the supermarket’s new Melbourne Fresh Distribution Centre (MFDC) in Truganina, Melbourne.
The multi-million state-of-the-art facility, which will be built by Vaughan Constructions, will store and deliver fresh produce and chilled products to hundreds of Victorian supermarkets, create 200 jobs during construction and 300 permanent new jobs when it opens in late-2020.
The custom-designed facility will replace Woolworths current operations at Mulgrave, and provide the leading national retailer with a market edge in terms of supply chain dynamics. The MFDC will be co-located with Woolworths’ meat supplier Hilton Meats’ production facility.
Co-location with Hilton and closer proximity to more fresh food suppliers will take up to 600 trucks off the West Gate Bridge each week and a further 3,000 truck movements off Melbourne roads each year.
“This development will help us deliver top quality fruit and vegetables to our customers fresher, faster and more efficiently than ever before. At one-and-a-half times the size of the MCG field, the distribution centre will provide a significant uplift in capacity to support our continued growth in Victoria. We’re proud to be investing in a best-in-class supply chain network in Victoria – delivering fresher food to our customers, taking trucks off Melbourne’s roads, and creating hundreds of new jobs,” Woolworths Chief Supply Chain Officer Paul Graham said.
At full capacity more than one and a half million cartons a week will move through MFDC bringing customers fresh fruit and vegetables and chilled goods from more than 500 suppliers.
The $135m investment on the MFDC is majority funded by landowner Charter Hall, with Woolworths signing an initial 15-year lease on the site. This builds on an extensive national relationship between Woolworths and Charter Hall across both industrial and retail properties.
The commissioning of the MFDC will take around 600 truck movements off the West Gate each week as Truganina is located closer to more Woolworths suppliers than Mulgrave. Co-location with Hilton Meats will take a further 3,000 truck movements off Melbourne roads each year as it eliminates shuttle runs between Mulgrave and Truganina.
The MFDC is also targeting a Five Star Green Star rating from the Green Building Council of Australia, with a solar panel system on the roof, charge points for electric trucks, and fuel savings of more than 400,000 litres each year from transport efficiencies. The Mulgrave Produce DC will continue to operate until the MFDC opens in late 2020.

Last week, Woolworths has announced that it will be divesting Endeavour Drinks alongside the ALH Group within half a year after successfully merging the two businesses.

Woolworths divests Endeavour – preparing for Kaufland?

Last week, Woolworths has announced that it will be divesting Endeavour Drinks alongside the ALH Group within half a year after successfully merging the two businesses.
Now called Endeavour Group, it has been measured to be the largest combined segment that spans both the drinks and hospitality sectors. Woolworths is expected to continue holding an 84% stake in the business during the second half of the year, but will eventually just hold a minority stake after demerging.
The decision was said to be for the sake of simplifying and streamlining Woolworths’ core grocery business and it was certainly a good move as far as its shareholders see.
However, retail analysts and thought leaders are also noticing that the grocery giant is actually exhibiting a familiar pattern of behaviour.
“We already had the demerger of Coles from Wesfarmers. Now, Woolworths’ streamlining its operations in a likewise manner,“ said Phil Chapman, director of retailer lease consulting firm Lease1. “It is clear that the Big 2 are preparing for the new wave of competition from foreign giant Kaufland. Retailers who rely on supermarket traffic need to be aware that the pressure is building.”
Kaufland is part of the fourth largest grocery conglomerate in the world and made its move into the Australian market back in March earlier this year. Industry analysts have observed that its arrival has prompted immediate response from the country’s famed Big 2 in the form of ramped up efforts to streamline their respective businesses. These include simplifying their organisational structure and preparing for more digitisation across several areas of their company.
And without a doubt, this may extend to retailers who position themselves close to the Big 2’s many giant supermarkets. Kaufland’s inevitable clash may require them to either seek new ways to depend on getting foot traffic outside with less dependence on grocers or reposition themselves to gain from Kaufland’s arrival.

Woolworths is said to become the first Australian supermarket to trial data embedded (or 2D) barcodes in stores from August.

Woolworths to trial new barcode

Woolworths is said to become the first Australian supermarket to trial data embedded (or 2D) barcodes in stores from August.
The trial has the potential to help reduce the millions of tonnes of food waste generated in Australia each year, and will eliminate the risk of customers purchasing expired products.
In collaboration with Woolworths, Hilton Foods and Ingham’s will start placing 2D barcodes on fresh meat and poultry products sold via Woolworths supermarkets nationally.
Woolworths general manager of business enablement Richard Plunkett said: “We’re proud to be the first Australian supermarket to invest in this technology, and hope it can help us further reduce food waste.
“2D barcodes have immense potential and we’re excited to see how they will improve food safety, traceability and stock management.”
For the past 45 years retailers have used 1D barcodes that identify the object. Unlike traditional barcodes, 2D barcodes contain information about the product’s batch, supplier, use-by date, and serial numbers at the point of sale. The barcodes store data in two dimensions, rather than in just a series of black and white bars and look like checkerboards or a series of traditional barcodes stacked atop one another
Currently the product recall process requires all recalled products to be removed from supermarket shelves and disposed of. The information supplied by 2D barcodes will allow retailers to pinpoint the specific batch affected and trace it back through the production line, making it easier to identify the source of contamination and avoid sending unaffected products to landfill.
The ability to add expiry and best before dates to a product’s barcode will also help eliminate any risk of retailers selling out of date products to customers by removing the need for team members to manually label products. When scanned at the point of sale, customers will be alerted that the product is past its expiry date and the system won’t allow the purchase.
Beyond food safety and food waste, data embedded barcodes have the potential to improve the traceability of the farm-to-fork journey in the future. Ingham’s has partnered with Woolworths to investigate the potential of the new barcodes on its products.
Ingham’s head of sales – Woolworths Ed Alexander said: “Ingham’s is proud to be a pioneer in the 2D barcode initiative with Woolworths.
“Food safety and traceability are paramount to our business. Delivering quality products that incorporate cutting edge technology to enhance these elements and provide a range of benefits to consumers is a step we gladly embrace.
“We’re very excited to be partnering with Woolworths in the initial roll out of this technology and look forward to seeing the real-time and long-term benefits it will bring.”
GS1, which develops and maintains global standards for business communication, has been assisting Woolworths with its trial.
CEO and executive director of GS1 Australia Maria Palazzolo said: “Four decades on from inception, barcode scanning technology in Australia continues to evolve.
“The fresh food sector relies on accurate and complete data to track a product’s journey all the way from the farm to the supermarket shelves. It’s great to see Woolworths leading the way in bringing 2D barcodes to shoppers at point-of-sale.”
Successful trials in Germany, the UK and Thailand have shown material benefits for both customers and suppliers.
A number of other suppliers across health and beauty, freezer and long-life categories have introduced 2D barcodes in anticipation of future barcode adoption.
Woolworths will work with industry bodies and suppliers to develop a phased roll-out plan to help ensure more suppliers can adopt the new printing technologies.

100% of Woolworths supermarkets now claim to be with an active food waste diversion partner.

Woolworths eliminates food waste from its supermarkets

In a bid to tackle the $20 billion food waste problem in Australia and its commitment to reduce food waste from going to landfill, Woolworths has announced that 100% of its supermarkets now have an active food waste diversion program in place.
From rescuing surplus fresh food and distributing it to hunger relief charity partners, donating stock feed to farmers or sending it for commercial organic composting, all Woolworths supermarkets nationwide now have at least one active food waste diversion partner in place.
With these programs in place,  Woolworths has recorded an average year-on-year reduction of 8 per cent in food waste sent to landfill over the past three years.
Woolworths head of sustainability Adrian Cullen said: “Food is meant to be eaten, not thrown – which is why together with our customers, our farmers and our community partners, we’re working to keep good food out of landfill.
“This is not a new journey for us – we’ve been working hard at this for the last decade and we are excited to hit a milestone ahead of World Environment Day that 100% of our stores now with a food waste diversion program in place.
“We heavily invested in our team members to ensure that they have the education, training, resources and equipment to better identify and divert surplus food that can no longer be sold away from landfill and toward the most beneficial stream – be it food rescue for hunger relief, farmer donations for animal feed or commercial composting.”
In the last year, Woolworths has diverted from landfill over 55,000 tonnes of food and enabled over 10 million meals to be delivered to Australians in need across the country.
Adrian Cullen said; “Working with our partners OzHarvest, Foodbank and Fareshare to feed Australian’s who would otherwise go hungry is our number one priority when it comes to diverting food from our stores,
“We then work with local farmers so that surplus food, which cannot go to hunger relief, is used as stock feed for animals or for on-farm composting. This helps us further reduce and re-purpose bakery and produce waste.”
To date over 750 farmers and community groups from around the country have joined the Woolworths Stock Feed for Farmers program and last year Australian farmers received more than 32,000 tonnes of surplus food from Woolworths that is no longer fit for human consumption.
Owner of Tasmania Zoo Rochelle Penney has been part of the Woolworths Stock Feed for Farmers program since the Zoo opened its doors 15 years ago.
Ms Penney said: “Our team collects several bins of unsold surplus fruit, vegetables and bakery products that are no longer suitable for sale, every day from our local Woolworths stores to supplement feed for our animals.
“With over 100 different species of animals, all with variable nutritional needs, the support we receive from Woolies through the Stock Feed for Farmers program is invaluable.
“The program is enriching the lives of our animals and providing them the experience to taste a wide variety of produce.
“Importantly, the savings we make through the program enable us to continue our important conservation and education work which includes breeding programs and caring for a number of critically endangered native and exotic species.”

Woolworths, Aldi increase their slices of the pie in 2018

Woolworths has increased its lead as Australia’s top grocery retailer, boosting its share of Australia’s total grocery market to 34% in 2018, up 1.4ppts from a year ago, according to Roy Morgan’s latest survey data contained within the Supermarket & Fresh Food Currency Report.
While Woolworths increased its market share, the newly independent Coles now has a share of 27.6% of the total grocery market, down 1.6ppts on a year ago. German supermarket Aldi has had a good year in 2018, growing its market share to 11.4%, up 0.5ppts from a year ago.
The other winners over the past year were Other Supermarkets outside the ‘big four’ such as 2018 Roy Morgan Supermarket of the Year Award winner Foodland, Foodworks and other supermarkets that increased their share of the total grocery market to 9.1% (up 1.2ppts), while IGA’s grocery share was down 0.4ppts to 7.1%.
 

Total grocery market – % market share 2017 cf. 2018. Source: Roy Morgan Single Source. Base: Grocery Buyers 14+, Jan-Dec 2017, n=12,312, Jan-Dec 2018, n=12,310.

Woolworths dominance is built on strong leads in key fresh food categories with the Sydney-headquartered retailer holding the largest market share in dollar terms for fresh meat, fresh deli, fresh bread and fresh fruit and vegetables ahead of Coles, Aldi and IGA supermarkets.
Over the last year Woolworths has grown its market share in dollar terms across all four fresh food sub-categories and increased its lead over nearest rival Coles. The two brands currently dominate Australia’s fresh food markets holding over 50% of each of the fresh food markets.
The December Supermarket & Fresh Food Currency Report is compiled from data collected as part of Roy Morgan’s Single Source survey, which involves more than 50,000 in-home, face-to-face interviews each year, including more than 12,000 detailed surveys of grocery and fresh food buying behaviour.
Roy Morgan CEO Michele Levine said the impressive performance of Woolworths over the last year has Australia’s leading grocery retailer in a strong position to deal with the entry of German ‘hypermarket’ Kaufland into Australia’s $100 billion+ grocery market.
“Australia’s leading supermarket chain Woolworths has increased its lead in the increasingly competitive grocery market in 2018, now capturing over a third of Australia’s total grocery spending in 2018 – up 1.4ppts to 34% from a year ago.
“The successful year for Woolworths has been built upon strong performances across the four key categories of fresh food. Woolworths has grown its market share in dollar terms for fresh meat, fresh deli, fresh bread and also fresh fruit and vegetables, and is the market leader in all four categories ahead of main rival Coles.
“The demerger of Coles Group from industrial conglomerate Wesfarmers in the December quarter of 2018 means Australia’s second largest supermarket chain now has the opportunity to refocus on its core business ahead of the imminent arrival of German retailer Kaufland.
“Kaufland has already bought six industrial sites in Melbourne at which it plans to open its successful ‘hypermarkets’ over the next two years before rolling out stores Australia-wide following in the footsteps of fellow German retailer Aldi. Aldi also had a good year in 2018 and grew its share of the total grocery market by 0.5ppts to a new high of 11.4%.
“In addition to Kaufland, the Australian grocery market is also anticipating a rollout of the ‘Amazon Fresh’ brand in the near future after the American Internet giant launched a food and grocery segment (although not yet fresh food) in the December quarter 2018.
“The increasingly competitive $100 billion+ grocery market in Australia means it is more important than ever for companies operating in the grocery and fresh food sector to track precisely where their customers, and future customers, live, work and shop,” Ms Levine said.
 

Woolworths to spend $57m on partly solar-powered DC

Woolworths has been building on its solar power capacity with each new DC. Photo shows the Melbourne South Regional Distribution Centre under construction.

Woolworths has turned the first sod on a $57 million expansion of the existing Adelaide Regional Distribution Centre (ARDC).
The project is expected to create approximately 140 local jobs throughout construction as Woolworths and Hutchinson Builders partner with local businesses on the 14 month building works.
The expanded ARDC is designed to deliver fresher, faster and more frequent deliveries to supermarkets in South Australia and the Northern Territory by mid-2020.
On completion, the expanded centre will span 94,000 square metres – more than four times the size of Adelaide Oval – boosting the capacity of the temperature control and ambient warehouse sections of the Gepps Cross site.
These expanded operations are set to significantly strengthen Woolworths’ 7-day-a-week delivery of fresh produce to communities across South Australia as well as into the Northern Territory.
Woolworths chief supply chain officer Paul Graham said: “This $57m expansion of our Adelaide DC forms a key part of our ambition to create a best-in-class supply chain network for our customers.
“The site’s proximity to the Adelaide markets has always been a strength, but this upgrade will allow for more frequent and faster deliveries to our stores to help fulfil our fresh food promise.
“We partner with dozens of local suppliers in South Australia, connecting products from growing regions including the Northern Adelaide Plain, South Murraylands, Riverland, Mallee, the Lime Coast and Adelaide Hills, to our customers.
“We have a long and proud history in South Australia, and this investment demonstrates our commitment to continued growth in the state and local jobs.”
Sustainable energy will help power the expanded distribution centre with Woolworths to install 3,500 solar panels (1.6MVa system) across the rooftop. This is the largest solar installation in Woolworths’ Australian network, and larger than the current installation at Adelaide airport.
The $2.5 million solar installation will provide around one-fifth of the centre’s energy needs, and produce enough green energy to power the equivalent of 300 homes.
Construction of an expanded recycling facility for pallets is also part of the project, reflecting our commitment to further reducing plastics and cardboard within our supply chain.
The expansion of Adelaide Regional Distribution Centre is to be funded by landowner, Growthpoint Properties, under a new 15-year lease over the entire distribution centre.

New frontier opens in the supermarket wars

Both Woolworths and Coles have declared a war on waste, going to differing lengths to convince the public that they take their plastic packaging waste seriously. It will be interesting to see how it affects suppliers.
Coles’s 10-point plan
Coles has undertaken to halve food waste across its supermarkets by 2020, make all packaging of Coles Brand products recyclable, and reduce plastic wrapping on fruit and vegetables.
The announcement of 10 Coles Commitments on Packaging and Recycling comes as the retailer prepares its customers for the phasing out of single-use plastic bags on July 1.
Significantly, Coles also pledges to divert 90 per cent of all supermarket waste (including food, cardboard and plastic) from landfill by 2022 and donate the equivalent of 100 million meals to people in need by 2020 by redistributing surplus food.
Coles managing director John Durkan said Coles wanted to lead the way in its commitment to the environment.
“We know that 69 per cent of customers say that we need to actively reduce waste and landfill through recyclable packaging and find alternative uses for waste,” he said.
“We are delighted to be the only Australian supermarket to sell own-brand water bottles that are both 100 per cent recyclable and 100 per cent made from recycled materials. Now we are the first major food retailer in Australia to announce a target to make all of our own brand packaging recyclable by 2020, ahead of the Federal Government’s target of 2025.”
“By the end of this year we will also connect every Coles store to the vital food rescue program, SecondBite, meaning surplus edible food from every Coles supermarket will be redistributed to people in need. By connecting an additional 130 supermarkets to SecondBite this year, we will also be further diverting food waste from landfill.
“By 2020, we want to provide the equivalent of 100 million meals to Australians in need. Since 2011, we’ve donated around 72 million meals to SecondBite and Foodbank so we’ve still got 28 million meals to go.”
Coles has also pledged to label all Coles Brand products with recycling information to help customers know how and where to dispose of their waste.
Coles’ commitments to recycling and packaging also include:

  • A program to reduce plastic wrapping of fruit and vegetables through new initiatives such as removing double plastic packaging for fruit, selling bunched vegetables like kale and silver beet without plastic, and removing plastic packaging from Coles Brand bananas.
  • Replacing packaging for a wide range of meat and poultry products with packaging made from recycled and renewable materials.
  • Replacing existing single use fresh produce bags with bags which have 30% recycled content.
  • Providing customers with an option to recycle all their soft plastics at every Coles supermarkets across Australia, to then be converted into a range of products including outdoor furniture and road base.
  • Providing an additional one million reusable crates for fresh produce in our Coles supply chain in 2019 to replace single-use cardboard and polystyrene boxes, adding to the 6 million reusable plates currently being used.

Coles’s
…achievements to date

  • Since 2011, we’ve donated the equivalent of around 72 million meals to SecondBite and Foodbank.
  • Since September 2014, all Coles Brand water bottles made from 100% recycled PET (rPET).
  • Only Australian supermarket to have its own crate recycling program in Australia with more than 6 million reusable crates in circulation.
  • Commitment to remove single use plastic shopping bags across all Coles businesses by 1 July 2018.
  • In 2011, Coles was the first Australian supermarket to provide a soft plastic recycling program to customers across Australia through REDcycle.
  • First Australian supermarket to provide soft plastic recycling in every store.
  • More than $12 million in grants or interest-free loans to 27 different producers as part of the $50 million Nurture Fund.

…and commitments for the future

  1. Divert 90 per cent of supermarket waste (including food, cardboard and plastic) from landfill by 2022.
  2. Halve food waste in Coles supermarkets by 2020.
  3. Donate unsold edible food from every Coles supermarket in Australia.
  4. Provide the equivalent of 100 million meals to Australians in need by donating unsold, edible food.
  5. Work with suppliers to reduce food waste.
  6. All Coles Brand packaging recyclable by 2020.
  7. More recycled material in Coles brand packaging.
  8. Introduce new labelling to promote recycling.
  9. In-store soft plastic recycling options in every Coles supermarket.
  10. Reduce excess packaging across our stores and supply chain.

 
Woolworths
Phasing out the sale of plastic straws, further reductions in plastic packaging in fruit and vegetables, and the launch of a new reusable shopping bag are amongst a number of sustainability initiatives announced by the Woolworths Group.
On the eve of World Environment Day, Woolworths Group CEO Brad Banducci made the announcements at an industry sustainability event hosted at the Group’s Support Office in Bella Vista, Sydney. The new initiatives announced, include:

  • By the end of 2018, all stores within the group in Australia and New Zealand will no longer sell plastic straws – saving 134 million plastic straws from going into circulation each year.
  • With the nationwide phasing out of single-use plastic shopping bags on 20 June, Woolworths Supermarkets will offer a new green reusable shopping bag – with a lifetime replacement offer – for customers to purchase. All money made from the sale of the Bag for Good in FY19 will go towards the Junior Landcare grants program.
  • In an ongoing effort to remove unnecessary packaging in produce, Woolworths is committed to trial the removal of plastic packaging on a further 80 lines over the next year. This will build on the 140 tonnes of plastic saved in the fruit and vegetables range in the last year.
  • A commitment for 100% of Woolworths Supermarkets to have a food waste diversion partner by the end of 2018.
  • Woolworths to lead the establishment of a new Packaging Coalition Roundtable bringing together government, NGOs and key industry partners including Unilever, Nestlé, Simplot, VISY and the Australian Packaging Covenant to find ways to move towards a circular economy in Australia.

Woolworths Group CEO Brad Banducci said: “In the last year, we have seen a shift towards more sustainable attitudes from our customers and the momentum is growing, with recent research showing a 15% increase in Australians now saying that taking care of the planet is important to them.
“While we’ve made progress in reducing the amount of plastic in our stores, supported recycling labelling initiatives, and made improvements in energy efficiency, sustainable sourcing and reducing food waste, we know that more needs to be done to meet our customers’ expectations.
“Today’s initiatives represent further small, but important steps in our commitment to make positive change happen. We understand the journey towards a more sustainable future has its challenges, but together with our customers and industry partners we are committed to moving our business, our country and our planet towards a greener future.”
The sustainability event at the Woolworths Support Office also included global perspectives on sustainable retailing from Peter Skelton from WRAP UK, while Craig Reucassel from ABC’s War on Waste facilitated a panel of industry leaders discussing the challenges and opportunities of moving to a circular economy.
The panel included Angus Harris (Co-CEO Harris Farm Markets); Anthony Pratt (Executive Chairman, Visy Australia & Pratt Industries); Claire Peters (Managing Director, Woolworths Supermarkets); Clive Stiff (CEO Unilever, Australia and New Zealand) and Paul Klymenko (CEO Planet Ark Australia Foundation).
 

ALC announces 2018 Forum speakers

Anthony Albanese, Shadow Minister for Infrastructure & Transport, is among a number of prominent individuals who will speak at the Australian Logistics Council’s (ALC) national freight and supply chain event, ALC Forum 2018.
Following the successful 2017 event, which was held in the Melbourne Cricket Ground, in 2018,  the Forum returns to Sydney’s Royal Randwick, taking place 6-8 March.
Other speakers for ALC Forum 2018 include:
• Brendan Bourke, CEO, Port of Melbourne;
• Chris Bresnahan, Operations Director – E-commerce Delivery, Australia Post;
• Royce Christie, General Manager – Government Relations, Toll Group;
• Paul Graham, Supply Chain – Chief Supply Chain Officer, Woolworths Group;
• Maurice James, Managing Director, Qube Holdings;
• Anthony Jones, CEO, LINX Cargo Care Group;
• Sal Petroccitto, CEO, National Heavy Vehicle Regulator;
• Melinda Pavey, Minister for Roads, Maritime and Freight (New South Wales);
• Paul Retter, CEO and Commissioner, National Transport Commission; and,
• Richard Sellers, Director General, Department of Transport (Western Australia).
The ALC said that ALC Forum 2018 will progress the issues put forward by ALC members in the final submission, focusing on the freight logistics industry’s priorities and expectations for the types of infrastructure investment and policy reform required to enhance national supply chain efficiency and safety.

ACCC says no to BP's acquisition of Woolworths service stations

The ACCC intends to oppose the proposed acquisition by BP Australia Pty Ltd of Woolworths Limited’s (ASX:WOW) network of retail service station sites.
Woolworths currently operates 531 sites and has 12 sites in development. BP supplies fuel to approximately 1,400 BP-branded service stations throughout Australia, setting fuel prices at roughly 350 of them.
“We consider that BP acquiring Woolworths’ service stations will be likely to substantially lessen competition in the retail supply of fuel,” ACCC chairman Rod Sims said.
“Woolworths is a vigorous and effective competitor that has an important influence on fuel prices and price cycles in many markets throughout the country. Many consumers seeking out cheaper petrol will head to Woolworths petrol stations.
“BP prices are significantly higher on average than Woolworths prices in the major capital cities (see charts below). BP generally increases prices faster than Woolworths during price increase phases, and is slower to discount during the price discounting phase of cycles,” Mr Sims said.
“We believe that fuel prices will likely increase at the Woolworths sites if BP acquires them and other retailers would then face less competitive pressure. The bottom line is that we consider motorists will end up paying more, regardless of where they buy fuel, if this acquisition goes ahead.
“Fuel is a major expense for many households, and even a small increase in prices due to reduced competition will have a major impact on drivers,” Mr Sims said.
“This acquisition will likely affect metropolitan price cycles by making the price jumps quicker, larger and more coordinated. Reduced competition will also mean that prices will not fall as far, or as quickly, in the discounting phase of the cycle,” Mr Sims said.
In forming its view, the ACCC conducted extensive data analysis of all major retailers’ fuel prices to determine the effect that BP and Woolworths have in both local and metropolitan-wide areas.
The ACCC considered whether the competition concerns in metropolitan and local areas could be addressed by divesting sites.
“This has been the most significant merger investigation and decision the ACCC has considered in 2017. The ACCC has determined that the underlying concerns arising from the proposed acquisition would not be addressed by the divestments proposed by BP,” Mr Sims said.
The ACCC took into account a large number of submissions from a broad range of market participants including motoring groups, competitors, and both corporate and individual consumers.
Price charts
The chart below, which was published in October when the ACCC released its study into the Brisbane petrol market, highlights the difference between each major retailers’ average regular unleaded petrol (RULP) price and the market average RULP price in Brisbane in the period 1 January to 30 April 2017.

Major retailers’ average regular unleaded petrol (RULP) price and the market average RULP price in Brisbane in the period 1 January to 30 April 2017. Source: ACCC calculations based on data from Informed Sources. Originally published in ACCC: Report on the Brisbane petrol market. Note: Informed Sources collects price data electronically from its subscribers and manually for other brands. Note: COCO means BP company-owned and operated sites, and excludes BP dealers sites; “cpl” is cents per litre.

The chart below shows the average price at BP company controlled sites and Woolworths sites, compared to the city-wide average, in each of Sydney, Melbourne, Brisbane and Perth, for the period of 1 January 2015 to 28 March 2017. The results for Brisbane are different to the above chart due to the different data-sets analysed.
Average price at BP company controlled sites and Woolworths sites, compared to the city-wide average.
Source: ACCC calculations based on data from Informed Sources.

More information is available on the ACCC’s public register: BP – proposed acquisition of Woolworths’ retail service station sites
Related but separate decision on authorisation applications regarding Shopper Docket and Rewards Loyalty Program
In a separate decision, and applying a different legal test, the ACCC was also required to consider authorisation applications from Woolworths and BP relating to aspects of their proposed commercial alliance.
The ACCC has decided to grant those applications for authorisation subject to conditions.
These conditions specify that BP and Woolworths must limit shopper docket and loyalty scheme discounts to no more than 4 cents per litre (in total per fuel purchase). Woolworths would not be permitted to fund more than 2 cents of the 4 cent discount.
While discounts to consumers are generally beneficial, the ACCC has long-standing concerns that fuel discounts offered through shopper docket or similar schemes can have anti-competitive effects if they are at a level that efficient fuel retailers are unable to match. The ACCC has also expressed its concern about the potential for supermarket funding of fuel discounts to distort competition in fuel retailing.
The conditions have been imposed to address these concerns.
However, the authorised conduct would only occur in the event BP acquires Woolworths’ network of service stations. As noted above, the ACCC today announced that it intends to oppose that proposed acquisition.
Further information, including a copy of the decision, is available from the ACCC’s public register: BP & Ors – Authorisations – A91580, A91581 & A91582.
Background information
The ACCC commenced a public review of the proposed acquisition on 15 March 2017 under the informal merger review process. On 28 April 2017, the ACCC commenced the related, but separate, Authorisation process for the loyalty program and shopper docket discount scheme.
The ACCC’s assessment of the proposed rollout of Woolworths’ Shopper Docket Discount Scheme and Loyalty Program was conducted separately to the assessment of the proposed acquisition. These two assessments have been undertaken separately because Woolworths and BP applied for authorisation of some aspects of the proposed transaction under a specific authorisation process set out in the Competition and Consumer Act 2010, and also sought clearance for BP to acquire Woolworths’ petrol stations under the ACCC’s informal merger clearance process, which is a separate process. As required by the Competition and Consumer Act 2010, the ACCC did not take into account any detriments or any benefits resulting from the proposed acquisition (if it were to proceed) as part of its assessment of the authorisation applications.
On 10 August 2017, the ACCC released a Statement of Issues in relation to the proposed acquisition outlining preliminary competition concerns. On 29 August 2017, the ACCC released a Draft Determination in relation to the Authorisation process (BP & Ors – Authorisations – A91580, A91581 & A91582).
BP supplies fuel to approximately 1,400 BP-branded service stations throughout Australia. Of these sites, BP controls approximately 350 sites, via ownership or commission agency arrangements. Additionally, BP sets the price of diesel only at approximately a further 30 ‘diesel commission agency’ sites. At the remaining BP-branded sites prices are set independently by third-party site operators.
Woolworths Limited currently operates 531 sites and has 12 sites in development. Woolworths entered fuel retailing in the late 1990s, establishing service stations that offer fuel discounts to those purchasing groceries at its stores. In August 2003, Woolworths entered into an alliance with Caltex to operate dual-branded service stations. These dual-branded sites are operated by Woolworths and obtain all fuels from Caltex.

Woolworths reaffirms ethical fresh food supply chain commitment

Woolworths has reaffirmed its commitment to ensuring that the human rights of all workers in the company’s operations and supply chains are protected.
As part of Woolworths’ continuing review of its ethical sourcing practices, the supermarket chain has committed to working collaboratively with the National Union of Workers (NUW) and other interested stakeholders, to identify and address human rights risks in fresh food supply chains in Australia.
“Our belief is that finding the right solution to address human rights risks in horticultural supply chains in Australia will be best achieved by working collaboratively with farmers, governments and unions,” Brad Banducci, CEO, Woolworths Group, said.
“We recognise the current efforts of these stakeholders, including the NUW, and are committed to actively participating in a process to deliver genuine improvements and sensible and practical reform.”
As part of the commitment, and following discussions with the NUW and the Australasian Centre for Corporate Responsibility (ACCR), Woolworths has committed to implementing an agreed pre-qualification programme for labour-hire providers, and educate workers in Woolworths’ supply chains about their workplace rights. This includes the right to join a labour union of their choice, have access to an effective grievance mechanism to ensure that human rights violations are reported, investigated and remediated, and be protected if reporting human rights violations.
“These commitments will give effect to our pledge in our Woolworths Group Corporate Responsibility Strategy 2020 to work with peak organisations to improve workers’ lives,” said Banducci. “They also strengthen Woolworths’ ability to manage human rights risks and ensure compliance with Woolworths’ Ethical Sourcing Policy and Policy for Employing or Engaging Overseas Workers.”

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