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Service Stations

MR KAINE: I have a question to Mr Humphries, the Minister for Consumer Affairs. Minister, I have recently had calls from the owners of several service stations in the Brindabella electorate and they have been expressing some alarm at proposals by oil companies aimed at forcing them out of their existing franchise agreements. How seriously does the Government view this action by oil companies, and what will it mean for competition between Canberra service stations if they succeed?

MR HUMPHRIES: Mr Speaker, I thank Mr Kaine for this question because I think anybody in an electorate in this Territory at the moment would have to be concerned about developments taking place in the petrol industry.

Mr Connolly: It was 67.9c when Labor left office.

MR HUMPHRIES: Petrol has also gone up all over the country, Mr Connolly. I know that the Liberal Government in Canberra is a very powerful and persuasive Government; but apparently our capacity to cause prices to rise across the whole of Australia, from Perth to Brisbane, is somewhat greater than the power I imagined that we actually had. Thank you for the flattering comment.

Mr Speaker, I think members have to be aware that whatever competitive elements there are in the Canberra market are easily dislodged or displaced by developments which are very much within the control of the major oil companies that work in this country. Only a few months ago Shell began to advise some of its franchisees that it would begin to effect multi-site franchising policy in respect of them. There are four dealers, at least, that we are aware of who were initially affected by that process. The concept, as members will be aware, involves a vesting franchise agreement for a number of retailing facilities across an area going into one dealership or one franchisee. This is particularly dramatic in the case of a development for Mobil dealers in the ACT. We were advised last week that 15 Canberra franchisees for Mobil would be reduced to just three; that is, 12 of the 15 would have to get out, and three of the 15 would be left essentially to run the other 12. That is an 80 per cent reduction in the number of franchisees for the Mobil market in Canberra, and that must have very serious implications for competition in this marketplace.

I announced immediately that the Government would introduce a moratorium on existing multi-site franchise agreements in the Territory, and it works like this: Existing owners of franchise agreements will be prevented from acquiring any further agreements than those they had in their possession as at 17 August this year until such time as the moratorium is lifted. Companies and individuals will not be allowed to establish separate companies or business entities for the purpose of acquiring additional franchises, and it will be illegal for groups or individuals to collude in any way which would see them effectively act, for business purposes, as a multi-site or area franchisee.

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