The competition regulator, the ACCC has thrown a spanner into the $95 million planned purchase of a big independent petrol station chain in Victoria by Caltex Australia (CTX).
In a statement yesterday, the regulator said, in a statement of issues on the deal that it had concerns about the level of competition in Victoria and feared petrol pries might rise as a result of the takeover of the Milemaker chain.
“Milemaker generally has average prices which are lower than Caltex, is quick to discount and often slow to respond to the large price increases that characterise the retail petrol price cycle,” Commission chair, Rod Sims said in yesterday’s statement.
Most consumers may be unaware of Milemaker, because its sites are branded Caltex and are difficult to distinguish from Caltex’s company-operated sites. However, the Milemaker sites set retail prices independently of Caltex (aside from diesel at certain sites).
“The ACCC’s initial observations suggest that the proposed acquisition may remove a vigorous and effective competitor in retail fuel in Melbourne,” Mr Sims said.
“Our concern, therefore, is that the acquisition may lead to Melbourne motorists paying more for petrol. "Milemaker operates 46 petrol stations in Victoria, mostly in an around Melbourne. Caltex plans to acquire the operator for $95 million.
In a statement, Caltex said it is confident of addressing the regulator’s concerns.
Ahead of the loss of the contract to supply Woolworths-branded petrol stations, Caltex said it would acquire Milemaker in Victoria. It also announced the acquisition of New Zealand retailer Gull New Zealand for $325 million. Both deals remain subject to government scrutiny before they can be finalised.
And with the proposed $1.8 billion BP acquisition of Woolworths-run petrol stations before the ACCC, the concerns it has with the planned Caltex deal in Victoria points to a tough time for the larger deal because of its impact on the national fuel market.
BP’s purchase of the Woolworths outlets is expected to take until early next year to finalise, with the expectation the ACCC may force the divestment of some of the service station and distribution assets before approving the deal.
Yesterday’s statement from the Commission has increased pressure on BP to make an offer to get a sense of what the regulator wants.
Caltex shares eased half a per cent to $28.32.
