The Petrol Retailers Association, a trade association representing the UK’s smaller service stations, has filed complaints with the Office of Fair Trading against supermarket group Safeway, accusing its new petrol discount offer of being “aggressive and predatory”, the Daily Telegraph said.
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The newspaper said Safeway earlier this month bgan a promotion offering up to 20p off a litre of petrol (currently 72.9p/litre at the group’s nearest store to just-auto) if shoppers spent £150 or more at one of its 480 grocery outlets.
Safeway claimed to be offering ‘free petrol’ because the maximum discount meant that customers would only pay the Customs duty and tax on petrol, the Daily Telegraph said.
The petrol retailers association has asked OFT director-general John Vickers to investigate Safeway, the newspaper said.
A spokesman for the association told the Daily Telegraph: “Historically, we have never seen a promotion to this extent where a supermarket is, to all intents and purposes, handing out petrol for free.”
According to the newspaper, the association claims that such tactics create an ‘uneven playing field’ in the industry because petrol-only retailers – ranging from giants BP and Shell to smaller, independent forecourts – are simply unable to compete with the supermarkets.
However, that claim appears to ignore the ever-larger supermarket-style stores that BP and Shell, among other oil companies, have been adding to their forecourts in response to the supermarkets’ incursion onto their previously exclusive territory, starting about 20 years ago.
The Petrol Retailers Association spokesman told the Daily Telegraph that about 3,800 independently-owned petrol forecourts have closed over the past six years and that could increase if Safeway’s tactics are followed by others.
The OFT responded that it has received “a couple of complaints” but it is not planning any further investigation at the moment, the newspaper said.
The OFT told the Daily Telegraph that Safeway is not a dominant player in the petrol industry – only 180 of its 480 stores have service stations – and the discount is only a temporary promotion, rather than a permanent pricing strategy.
The supermarket company has refused to say for how long the ‘Petrol Payback’ discount will run, confirming only that it would last “for the forseeable future”, the Daily Telegraph said.
Fuel protests in the autumn of 2000 made the price of petrol a sensitive political issue because UK drivers pay more to fill their car than in most other European countries due to the high levels of tax imposed by the government, the newspaper added.
Previous so-called ‘supermarket petrol price wars’ have benefited motorists by forcing the average price of petrol down across the UK but diminished profit margins resulting from the cut-throat competition have forced smaller and many independent forecourts out of business.
Many former UK roadside service stations have been turned into used car or tyre shops, or their sites have been redeveloped completely, though derelict forecourts are still not uncommmon.
