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Australia antitrust regulator raises flags on BP Woolworths petrol buyout

Australia antitrust regulator raises flags on BP Woolworths petrol buyout
August 10, 2017
LONDON (Reuters) - Australia's antitrust regulator said on Thursday it was concerned BP Plc's plan to buy the petrol stations of grocery giant Woolworths Ltd would hurt competition, a sign it may block the A$1.8 billion (1.07 billion pounds) deal. The Australian Competition and Consumer Commission (ACCC) said the buyout would cut the number of major rivals selling petrol, reducing the incentive to keep retail prices low. "As a result, motorists may end up paying more at the pump," ACCC Chairman Rod Sims said in a statement. Woolworths and London-based BP announced the deal in December 2016, a major component of the Australian retailer's effort to cut non-core businesses and concentrate on a supermarket price war with rival Coles, owned by Wesfarmers. Woolworths issued a statement noting the regulator's concerns and said it would "continue to work with BP and the ACCC to progress the merger clearance process". The ACCC said Woolworths appears to influence fuel prices in large Australian cities, either by leading price cuts or quickly following competitors' price cuts, and "we are concerned that BP would not follow Woolworths's pricing strategy". The regulator said it will publish a draft decision later this month, with a final decision scheduled for Oct. 26.