Why Cheap Petrol Shopper Dockets Are Risky

Offered the chance to save 45 cents a litre on petrol, few drivers are going to turn it down. However, the Australian Competition and Consumer Commission (ACCC) argues that those shopper docket discounts are actually damaging to petrol prices in the long term.

Petrol picture from Shutterstock

Speaking at a business lunch in Melbourne yesterday, ACCC chairman Rod Sims explained what the potential issue is:

Our concerns have been intensified by the expanded use of shopper docket and other discounts by both Coles and Woolworths recently. These have varied in level of discount, frequency and duration, and have now reached up to 45 cents per litre. While large shopper docket discounts provide short term benefits to some consumers, the likely harm to other fuel retailers and therefore to competition and the competitive process for petrol retailing could well be substantial. Even at the level of eight cents, it would be difficult to see how an unsubsidised fuel retailer could compete on a sustainable basis. Now, the discounts are substantially higher. If Coles and Woolworths wish to offer their customers a discount, it should be off supermarket products, not petrol. The ACCC believes this activity is likely to have a negative effect on competition in the petrol industry. Over time, higher petrol prices could be the result.

In other words: too many discounts could drive everyone other than Coles and Woolworths-backed outlets out of business, at which point they could charge whatever they liked.

Despite that logic, I can't imagine many people turning down a shopper docket on principle. Plenty of people are vocal in their criticism of the dominance of Coles and Woolworths and their potential impact on local suppliers. In practice, though, we're more than happy to buy store brands when they're cheaper.

It's a tricky area for the ACCC, since it can't ban the issuing of shopper dockets. It has been investigating whether these represent an abuse of market power since last year, and says it will report by the end of this year. The two supermarket giants are subject to scrutiny in several other areas, including presenting vegetables as Australian-sourced when they weren't and claiming goods were baked fresh in store when they were imported and reheated.


    This is what's known as a collective action problem. Lots of people would turn own the offers if everyone else did, but they know that going it alone hurts only themselves.

    I'm lucky enough to have a no-name servo down the road that regularly has the cheapest fuel I see all day. And if I need anything else while I'm there: 4c off if I spend $5 instore.

    Despite that logic, I can’t imagine many people turning down a shopper docket on principleI may only be one person but I have refused to use those stupid things from the start. I don't think anybody I know would call me a saint either, I just never understood how the big two were allowed to get away with this nonsense? The ACCC has been a toothless tiger from the start too, time to give them some teeth me thinks...!

    Last edited 30/07/13 9:34 am

      So you'd rather donate more money to the multi-million/billion dollar businesses? If you used the voucher, you would pay them less.

        WTF...?? I think it costs more trying to find a station that's convenient to your location than you save in the docket. You need to keep in mind though, that these guys aren't in it for your benefit mate, they're in it for one thing only... to make more profit for the share holders. So on that principle alone, I choose not to play...!

          Businesses have a profit motive. SHOCK SHOCK HORROR HORROR SHOCK SHOCK HORROR!

            Yes smartass they do, but what might really shock you is that they're not interested in just making a profit, they want super profit. Something they make every year, however when the super profit is slightly lower from one year to the next, they sack people in order to make a bigger profit next time. Aint they just angels now...?

              Well that rigorous economic analysis has just blown my mind.

              If by super profit you mean economic profit, then sure this happens. We don't have perfect competition in real world markets. That still doesn't make firms evil.

              Sacking employees has a cost. It's not usually done on a whim.

              Unless you are Jean-Baptiste Zorg I suppose.

              I'm not actually defending firms though. Regulatory capture is a big issue for me for example. I just think your original post was ridiculous as it indicated that you refused to interact with a firm that has a profit motive. If you feel your original post did not accurately reflect your views then I'm happy to acknowledge that.

                as it indicated that you refused to interact with a firm that has a profit motive and you think my comment was ridiculous, I never said I refused to shop there, there aren't that many choices afterall because they've basically killed them all off!!
                That still doesn't make firms evilNo it makes them greedy!!
                By super profit I mean 'hundreds' of percent above that needed to be successful. I'm talking about making money at the expense of the people they are selling to with no real motive except that of making their stockholders richer than they are now. If they sold their products with the economy and the future of food production in mind they could do so and make good money without driving the competition to bankruptcy. If that makes me an idealist then so what? it doesn't hurt anybody and it's a small voice in the name of conserving the market as a whole. Having said that it's clear you are just trolling so there's no point in continuing on a circular argument!

                Last edited 07/08/13 12:20 pm

                  I'm not trolling, I'm disagreeing with you.

                  I interpreted 'I choose not to play' as the action of boycotting. If that was not what you meant I apologise for misunderstanding.

                  I have no problem with a firm making as much profit as they can, as long as their actions aren't unethical. What you outlined in your last post would be considered unethical but most firms can't make money without servicing their customers.

                  The rest of the stuff is a bit qualitative 'successful etc' for me to have an opinion on. I think you've ameliorated your original post and what I criticized so I'm more comfortable with your position now.

          You can save a few dollars by using one of those vouchers. Coles and Woolworths petrol stations are pretty common, so you don't have to drive around "trying to find a station that's convenient".

    I always turn down the discout dockets for Woolworths petrol on principle. I have never (and will never) buy petrol from a Woolworths depot - no matter how much discount they give.
    Although, I do admit to buying petrol from Coles Shell stations occasionally because I always bought my petrol there before Coles bought into it.

    Would we also have to shop at independent supermarkets? I know that the reason why Coles and Woolworths can offer these discounts, is because they offset what they lose at the petrol station, in grocery's either through attracting more people to their shop or increase individual item pricing.

    So really to "vote with our wallets" we would have to stay away from them completely.

    Yes, I'm the same. I refuse to use shopper dockets. Yes, I'm aware that I already pay the discounted amount plus some on my groceries. I understand why people do it though. In a place where our dollars are dwindling and seems to buy less and less every year while prices seems to increase all the time. People need to get as much off as they can get and for some people its just a matter of survival. However corporations are preying on this, to make them dominant over people, not just the marketplace. Once the dominance is established they will do whatever they want.

      I collect the vouchers, and keep the barcode on hand just in case the place I happen to stop for fuel is one that takes them.

      It does not enter my decision process for choosing a fuel outlet though, my local station is a Gull anyway.

    I don't use them simply because the servos without them are usually the same price as the discounted stuff from Coles or Safeway. Plus I always find it amusing when I'm driving on a Thursday, notices Coles has put their price up by 12c, get home and sure enough I have an email, "save 12c a litre when you spend $100 at coles this weekend".

    I'm predicting that in 5 years time, there will only be 2 petrol companies left: Coles Petrol (Shell renamed), and Woolworths Petrol (Caltex renamed). Ampol disappeared many years ago, and probably won't be long before BP also disappears.

    Back in the day, 4c/L offer was introduced. Caltex increases price by 4c/L, offers the 'discount'. All other companies follow, and have their fuel price set to the non-discount price, or 1-2c/L lower.

    Fast forward to now, inflation causes all prices to rise. Slightly higher inflation due to the artificially inflated price following the discount back in the day.

    Amongst all this, AUD is strong. Fuel price goes up. AUD drops, fuel price goes up.

    Fast forward to a year in the future - ACCC bans shopper dockets. WW/Coles fuel prices jump up to the non-discount price, which is 4-8c/L higher than discount.

    tl;dr we get screwed over anyway.

    i noticed one day out of town, about 100km from Sydney, that fuel was about 15c cheaper then what they were in Sydney metro. It was one of the old Shell servos not owned by the company...still franchised. No major supermarket around either. was surprised as many years ago, fuel used to slightly more expensive as the extra transportation costs used to be factored in.

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