Gasoline inquiries find no evidence of anti-competitive behaviour.

Ottawa, le 18 mars 1997 - Investigations by the Competition Bureau into practices of several major gasoline companies have produced no evidence to support allegations of price fixing, anti-competitive behaviour and misleading advertising.

"Thorough investigations have been undertaken by Competition Bureau staff who were assisted by independent experts", said Konrad von Finckenstein, c.r., Director of Investigation and Research¹ who is responsible for the administration and enforcement of the Competition Act. "No evidence of any competition offence was found."

Au During the Spring and Summer of 1996, four gasoline inquiries were initiated following the receipt of applications pursuant to section 9 of the Act.

There was an allegation that the major gasoline companies had engaged in a national, price fixing conspiracy. The investigation determined that there was no evidence to support this allegation.

A second allegation was made that Ultramar Canada Inc.'s Value Plus marketing campaign was a predatory pricing practice aimed at eliminating the competition and was misleading. The investigation concluded that the price war which broke out in Quebec and the Maritimes in the summer of 1996 was initiated by a variety of firms, including independents, and that Ultramar initiated price decreases a relatively small percentage of the time. Overall, the investigation concluded that the price wars were an indication of healthy competition for market share.

A third allegation addressed the issue of abuse of dominant position as it related to Ultramar and other regional and national petroleum companies. The investigation found no evidence to support the allegations that the companies were squeezing the margins available to independent petroleum marketers with the intent of forcing the independents out of business. In fact, the margin between crude and retail prices has been shrinking for all firms over the past decade. The evidence indicated that declining margins being earned by large and small Canadian petroleum companies are the result of competition and the restructuring in the industry.

The fourth allegation that the national and regional petroleum companies were selling gasoline at prices lower than acquisition costs was also investigated. The inquiry concluded that the pricing practices were not designed to eliminate or discipline gasoline retailers, but were as a result of the price wars at the retail level in Québec.

There was a fifth allegation that Ultramar made false and misleading claims in its advertising campaign. The investigation found that the claims made by Ultramar did not raise any issue under the Act and that the statements made were not misleading.

"The role of the Competition Bureau is to examine and prevent anticompetitive behaviour; thereby ensuring a competitive marketplace", said Mr. von Finckenstein. "In fact, in the gasoline industry alone over the past number of years we have investigated close to fifty cases involving alleged anticompetitive behaviour and have prosecuted 11 of them, resulting in 9 convictions."

For copies of background material or expert reports, please contact the Bureau's Information Centre.