Competition watchdog the ACCC has secured a deal with supermarket giants Coles and Woolworths capping petrol discounts at 4¢ a litre. The deal will see large cross-subsidies for fuel, estimated at between $350 million to $509 million in 2013, reallocated to deeper discounts on grocery items. “I'm quite pleased with them giving discounts off groceries and discounts off petrol – it was the linkage we objected to,” ACCC chairman Rod Sims says. “[The major supermarket chains were] using their position and profits in one market to subsidise prices in another market – that was what was causing the problems. “Our evidence was it appeared when shopper dockets went above 4¢ a litre that petrol prices went up. People who didn't have shopper dockets were paying more for petrol when shopper dockets went above 4¢ a litre.” Jetstar Asia records a profit as Qantas nosedives Jetstar Asia, a joint venture partly owned by troubled airline Qantas, has reported a small full-year profit for the year to June. The airline, owned 49% by Qantas with the remainder held by Singaporean businessman Dennis Choo, posted a bottom-line profit of $S2.5 million ($A2.2 million) for the year to June, compared with $S2.1 million a year earlier. However, the carrier faces intensifying competition from other low-cost carriers in south-east Asia, including Malaysia's AirAsia and Singapore Airlines-backed Tiger Airways. Chinese shadow banking warnings Experts are warning China’s economy could be derailed by excessive borrowing through the shadow banking system, with the sector now accounting for the equivalent of 40% of China's gross domestic product (GDP). The growth of the sector has been caused by strict lending requirements to non-government entities, forcing many businesses to look elsewhere for finance. “Shadow banking is the financial activity that exists outside the formal banking sector,” says Peking University finance professor Michael Pettis. “So it includes things like wealth-management products, it includes pawn shops, it includes a wide variety of things – but basically it's the non-regulated part of the banking sector.” “There's been an increasing sense that a lot of [that] borrowing is simply going to protect existing borrowers from going bankrupt.” Overnight The Dow Jones Industrial Average closed up to 15882.2. The Aussie dollar is at US87.53 cents.
China has announced the creation of a new free-trade zone covering nearly 29 square kilometres on the eastern outskirts of Shanghai. The Chinese government says the new FTZ would open up the services sector to increased competition and would also serve as a testing site for future financial reforms, including a convertible yuan and liberalised interest rates. “It follows the trend of global economic developments and reflects a more active strategy of opening-up,” Commerce Minister Gao Hucheng told the state-run Xinhua news agency. ACCC accuses SalesForce and Origin of misleading door-to-door claims Consumer watchdog the ACCC initiated Federal Court proceedings against marketing company SalesForce and Origin Energy over its door-to-door sales practices, marking the fifth such case against an energy retailer. The ACCC alleges sales representatives harassed or coerced some customers, with some customers told there was a government requirement for them to switch their energy supplier to Origin. “The ACCC alleges that SalesForce sales representatives acting on behalf of Origin Energy made numerous false and/or misleading statements to consumers and breached the unsolicited consumer agreement (UCA) provisions of the Australian Consumer Law,” ACCC Chairman Rod Sims says. “The allegations also involve several instances of unconscionable conduct as well as instances of alleged undue harassment and/or coercion by sales representatives, which the ACCC considers to be particularly serious.” Auto component price fixing allegations The ACCC has accused a number of Japanese firms of price fixing, alleging the practice has pushed up the cost of some cars in Australia for consumers. As part of the proceedings, the ACCC accuses auto parts distributor Yazaki of pushing up the cost of wire harnesses for Toyota cars. “Wire harnesses can be anything up to 8% of the cost of a car, so this conduct has a serious impact on what people pay for a motor vehicle,” Sims says. “We also instituted proceedings this year for a number of Japanese companies in relation to ball bearings. And we are close to settlement with one or two of those companies at the moment.” Overnight The Dow Jones Industrial Average is down 0.46% to 15258.24 and the Aussie dollar is down to US93.12 cents.
The consumer watchdog has issued a warning about widespread unscrupulous industry practices in the door-to-door sales industry, but the industry says many of the practices raised by the ACCC have been addressed.
The competition watchdog is reminding small businesses to review its mandatory reporting regime regarding product safety, which has triggered 40 product recalls in six months.
The ACCC has urged hospitality businesses to ensure accurate pricing on Sundays and public holidays after a former café owner was fined $20,000 for failing to provide all-inclusive pricing on menus.