UK supermarket chain Safeway could soon face the Competition Commission over its “money off” petrol promotion after legal experts suggested that the deal is unfair to sector competitors.
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The deal provides shoppers who have spent over £150 (US$221) in store with vouchers for 20p per litre off petrol prices.
A Safeway spokesman insisted “we do not believe that the promotion is unfair”, but experts have pointed out that Competition Act laws prevent firms cross-subsidising parts of their business with proceeds from another part. This means that Safeway cannot fairly use profits from its grocery stores to pay for price drops that undercut the UK petrol market.
Several lawyers added that Safeway should not be running the promotion “indefinitely” because this could be a permanent change to business practice, and the law says that a promotion can only run for a “sustained period”. The Petrol Retailers’ Association (PRA) said that it might take the issue to the Competition Commission if Safeway’s promotion is seen to last for more than two months.
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By GlobalData
