Maja Cvjetanovic is a senior at the University of Queensland in Australia studying law.
Coles and Woolworths—the major Australian supermarket chains—have teamed up with certain gasoline outlets to offer their customers discounts on gasoline. The discount scheme is not uncommon amongst other jurisdictions, including the United States and various European countries . Several US states in particular have responded to the initiative with the so-called ‘sales-below-cost’ laws . The discount works after a customer spends a "minimum" (typically $30) on their grocery shopping at a supermarket chain. The customer then presents the receipt to the relevant gasoline station in order to receive a discount of 8 cents per liter, for example.
Academic literature defines this conduct as "bundling," which occurs when one firm offers a discount to its customers, conditional upon the purchase of another product or a particular volume of another product . The conduct can be contrasted to its close counterpart, "tying," in the sense that the latter practice occurs when the two products are tied together, giving the customer no choice but to purchases both items . This practice is widespread among many different industries; some commonly cited examples include the bundling of hotel packages at discounted rates and home telecommunication plans .