The remaining 50 per cent interest in the wholesale business of Liberty Oil Holdings pursued by Viva Energy won't be opposed by government watchdog the Australian Competition & Consumer Commission (ACCC) announced today.
The proposed acquisition pertains only to Liberty’s wholesale business.
Viva Energy's interest in Liberty’s retail business, according to the ACCC, will remain at 50 per cent.
Viva Energy and Liberty Oil are both wholesalers and retailers of fuel products.
The ACCC found that the proposed acquisition is unlikely to substantially lessen competition in the wholesale supply of fuel products.
“Retailers told us that there are alternative wholesale suppliers and alternative brands they could switch to," ACCC Commissioner Stephen Ridgeway said.
"We consider that, post-acquisition, the threat of fuel retailers switching to an alternative supplier is likely to constrain Viva’s wholesale prices and supply terms,” he said.
The ACCC said it also considered the effect of the proposed acquisition on competition in the retail supply of fuel products in metropolitan Adelaide and Melbourne and in local areas across the country.
“In metropolitan Adelaide, most Liberty branded sites are dealer sites, where Liberty does not set the price. The share of Liberty branded sites is relatively low and there are other retailers in Adelaide that are likely to constrain city-wide prices, such as United and X Convenience. Therefore, price increases from this proposed acquisition are unlikely,” he said.
“In metropolitan Melbourne, another city where Liberty branded sites operate, Liberty has a very small share of retail sites. The proposed acquisition is therefore unlikely to have a significant impact.”
In local areas where Liberty retail sites overlap with Viva Energy retail sites, including Coles Express sites, the ACCC concluded that in most of these areas sufficient competition would remain after the acquisition.
In a statement issued by the ACCC Ridgeway said potential consumer concerns regarding local areas were identified.
“The merger parties provided further information or implemented changes which addressed our concerns,” he said.
Viva Energy currently holds a 50 per cent interest in Liberty.
Under the proposed acquisition, Viva will own all of Liberty’s wholesale business and its interest in Liberty’s retail business will remain at 50 per cent.
Viva and Coles Group Limited announced on 6 February 2019 that they had restructured their alliance arrangement.
It was extended until 2029.
Under the new arrangement, which commenced 1 March 2019, Viva Energy sets retail prices at Coles Express/Shell co-branded sites and Coles Express operates those sites as Viva’s commission agent.
There are over 700 of these sites in total across Australia.
Viva also holds a 50 per cent interest in Westside Petroleum Consolidated Holdings Pty Ltd (Westside).
Westside has a network of service stations in NSW and Victoria, including sites operated by Westside directly or through a commission agent and sites operated by dealers.