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Wesfarmers Ltd’s (ASX:WES) share price steady despite news Coles will sue ATO

Credit: Patrick McKnight

Wesfarmers Ltd’s (ASX: WES) Coles supermarket business is suing the Australian Taxation Office (ATO) for $40 million paid in fuel excise, according to the Sydney Morning Herald.

Wesfarmers shares are up a modest 0.5% to $45.76 in early morning trade, despite a succession of falls across September and October.

According to the article, Coles has been in dispute with the ATO since 2016 regarding 107 million litres of fuel bought between 2014 and 2017 which were lost due to evaporation or leakage.

The Wesfarmers share price still offers a 7.7% 12-month return, despite a difficult few months, with the announcement it would demerge its Coles business met with a mixed response from investors.

Supermarket rival stock Woolworths Group Ltd’s (ASX: WOW) share price is slightly better positioned for the year, with a return of 10.4% and its share price up 0.8% to $28.83 at the time of writing.

One to watch in the space is the up-and-coming Metcash Limited (ASX: MTS) which broker Morgan Stanley has picked for outperformance in the short term.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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