ACCC approves Viva Energy’s acquisition of Liberty Oil stake

The Australian Competition and Consumer Commission has given its approval to Viva Energy Australia’s proposed acquisition of the remaining 50% stake in Liberty Oil Holdings’ wholesale business.

Viva Energy Australia, a wholly owned entity of Viva Energy Group, and Liberty operate as wholesalers and retailers of fuel products.

The proposed acquisition only involves Liberty’s wholesale business. Viva’s interest in Liberty’s retail business will stay at 50%.

The ACCC gave the approval as it judged that the proposed acquisition was not likely to substantially reduce competition in the wholesale supply of fuel products.

ACCC commissioner Stephen Ridgeway said: “Retailers told us that there are alternative wholesale suppliers and alternative brands they could switch to. 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.”

The Australian competition watchdog also evaluated the impact of the proposed acquisition on competition in the retail supply of fuel products in metropolitan Adelaide and Melbourne, as well as in local areas across Australia.

Ridgeway said: “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.”

“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.”

The ACCC concluded that in local areas where Liberty retail sites overlap with Viva retail sites, there is sufficient competition even following the acquisition.

Ridgeway added: “We identified potential competition concerns regarding some local areas. The merger parties provided further information or implemented changes, which addressed our concerns.”

Viva’s wholesale operations consist of supply to fuel retailers, distributors, independent service stations, commercial customers and rural customers. The company sells fuel to Liberty’s wholesale business.

Liberty’s operations consist of supplying fuel to distributors, independent service stations, commercial customers and rural customers. The firm wholesales fuel to a network of Liberty or Shell-branded service stations operated by dealers.

Viva currently has a 50% stake in Liberty and, as per the proposed acquisition signed in April 2019, will own all of Liberty’s wholesale business.