Woolworths customers qualify for a 4 cents a litre discount by spending $30 or more in a Woolworths supermarket. But a further 4 cents a litre discount is available if customers spend an additional $5 on convenience items at a Woolworths petrol station. “In this way, Woolworths gives a total discount of 8 cents per litre on a single acquisition of fuel to customers who have qualified for the initial discount on the basis of their supermarket purchases,” the ACCC says. The ACCC alleges that Coles is offering and allowing a bundled discount of 14 cents per litre, made up of 10c per litre for spending $20 or more on groceries at a Coles branded petrol station, plus an additional 4c on the presentation of a docket obtained by spending $30 or more at a conventional Coles supermarket. As the discount of 14 cents per litre is only available to a customer who has made a qualifying supermarket purchase and because it exceeds 4 cents per litre, the ACCC says Coles is also in breach of its undertaking. "The ACCC takes alleged breaches of undertakings extremely seriously. Such undertakings are generally accepted by the ACCC as an alternative to the ACCC taking court enforcement action," ACCC chairman Rod Sims said on Tuesday. Before the deal between the ACCC and both supermarket chains was struck in December, the competition regulator had been investigating the popular fuel shopper dockets for more than a year. Some independent fuel retailers and grocery chains claimed the discount fuel offer was being used to squeeze them out of the market.

Both retailers defended their petrol discount bundling offers, with a spokesman for Coles saying it would argue for the legality of its offer in court. "Coles vigorously defends our ability to offer our customer great value on both groceries and fuel. We welcome the opportunity to clarify conflicting interpretations of the voluntary undertaking on fuel discount dockets in court." A spokeswoman for Woolworths said it was disappointed it has been curtailed from offering greater petrol discounts to its customers and is discussing with the ACCC ways of making its discounts independent of each other with these talks continuing. ''We believe our undertaking with the ACCC allows customers to combine offers of 4 cents from the supermarket and 4 cents from the petrol store to receive 8 cents a litre off their fuel,'' she said. Latest industry data shows Woolworths and Coles-branded petrol stations control 25 per cent of all sites in Australia and account for 50 per cent of retail petrol volumes. The duo rake in around $13 billion a year in fuel sales from their 1300 branded service stations and convenience stores.

The petrol shopper docket discounts, which typically sat at 4 cents per litre but before the December deal were known to spike to between 20 cents and 45 cents, also drew flack from politicians and retailer associations. Mr Sims has previously spoken out against the shopper docket schemes. Last July, he warned the shopper docket schemes may actually push up the price of petrol and create an unassailable duopoly. "If these shopper dockets continue at these levels it's going to be very hard for other players to compete, and we may just end up with two players in the country selling petrol, which is not going to be in your interest," Mr Sims told a business lunch at the time. This morning, Mr Sims said that following an extensive investigation, the ACCC had been concerned that fuel savings offers could have long-term effects on the structure of the retail fuel markets, as well as the short-term effect of increasing general pump prices. "It is pleasing that Coles and Woolworths advise that they are honouring their undertakings to fund all fuel discounts from their fuel operations, but we are concerned that the bundled discount offerings in excess of 4 cents per litre are contrary to the terms of the undertakings," Mr Sims said.

"Where there is a dispute between the ACCC and a party which has given a court enforceable undertaking and the ACCC considers that there is non-compliance with the undertaking, as is the case here, the ACCC will take prompt court action to enforce the undertaking." The ACCC is seeking declarations, costs and other orders. Directions hearings are set for April 3 in the Federal Court. In separate proceedings, Woolworths has sought a declaration in relation to a proposed future fuel discount offer, which the ACCC also said it would consider a breach Woolworths' December shopper docket undertaking.