SMALL south-west supermarkets have warned they face a tough future as Coles and Woolworths ramp up a fuel docket war.
The bosses of three large south-west supermarket chains, Swintons, Ritchies and Daly’s IGA have each witnessed shrinking profits and fewer customers who are switching sides to take advantage of fuel discounts of nearly 40 cents a litre.
Michael Daly, the co-owner of several supermarkets in Koroit and Portland, said smaller chains such as his were paying the discount consumers got at the bowser.
“Is it a discount? Someone has to pay for it. They (Coles and Woolworths) are not in the business of giving things away for free,” Mr Daly said.
“They don’t do it because they’re good guys. They’re doing it to improve their bottom line at the expense of the independents. It is hurting businesses.
“They own well over 80 per cent of the supermarkets and 60 per cent of the fuel. They have a monopoly on the two markets.”
Mr Daly, who has previously served as the IGA national board chairman, said his stores ran fuel docket deals of up to 4 cents a litre.
“When it goes up to 10 cents or 40 cents, that’s just ridiculous.” Mr Daly called for legislation and the Trade Practices Act to be changed.
Ritchies IGA owns more than 70 stores around Australia, including supermarkets in Camperdown, Timboon and Cobden.
Chief executive Fred Harrison said the company had been forced to slash staff hours and foreshadowed redundancies if the petrol war dragged on unhindered.
Phil Crisara, a Melbourne-based operations officer for the owners of Swintons IGA in Warrnambool echoed similar concerns.
“It’s pretty hard to compete price for price when they’re offering to take $20 off the cost of the petrol tank,” he said.
The Australian Competition and Consumer Commission (ACCC) has been investigating the use of dockets over the past 12 months and delivered a scathing report on the practice earlier this year. Investigations are continuing.