When Rutherford motorist Brett Clulow challenged Woolworths Petrol about its wildly variable fuel prices he did not expect the retail giant to claim it was simply acting as “a price follower”.
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This means that Woolworths service stations shy away from setting the pricing pace. Consequently they do not automatically pass on to consumers any cost benefits gleaned from superior market share or bulk buying power to consumers.
Instead of setting the benchmark, they align their cost per litre to competitors in their own, small geographic footprint.
Yes, that’s right. The arm of a major, national retailer instructs outlets to mark step with independents and others in what a Woolworths spokeswoman defined as a local area extending three to five kilometres away.
This explains why Mercury readers such as Mr Clulow regularly identify price discrepancies above 10c/l between sister petrol chain stores separated by a few suburbs.
Mr Clulow rejects the Woolworths explanation, and the Mercury agrees.
Major retailers Coles and Woolworths pulled out all stops to establish absolute market dominance during the much-publicised “milk wars” where prices of own-brand milk fell to $1 a litre.
The negative effects of these cheap products on dairy farmers have been widely reported, but that has not stopped the supermarket giant from offering the low price.
This apparent gulf in attitude flies in the face of everything a free market and healthy competition are supposed to achieve.
Petrol giants are taking a back seat on prices because they are not forced to pass on the best possible price.
Maitland motorists have long suffered with unreasonably high petrol prices and it’s unlikely anyone will heed Mr Clulow’s call for the companies to develop a social conscience.
We are our own best advocates. Help the Mercury track petrol prices. Tweet your findings to @maitlandmercury #fuming or email nick.bielby@fairfaxmedia.com.au
