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Nozzle News - April Issue - The Newsletter for Service Station Members

Inside This Issue:
  • About this Newsletter
  • Industry News
  • Member Spot
  • Caltex to Exit Franchising
  • Oil Remains King
  • Fuel Volume Hits Coles Results
  • Upcoming Events

The popular Nozzle News returns as a regular newsletter exclusively for Service Station Members of MTA NSW and business partners.

Industry happenings, oil company developments, compliance issues, new products and equipment, government legislation requirements and submissions will all be covered as and when topical.

Questions, feedback and input from you, as an MTA NSW Member is welcome and encouraged.

This newsletter augments the many benefits and services you already receive from your membership of MTA NSW.

Members can utilise a number of benefits and resources designed to facilitate the running of your Service Station business. From Employment Relations advice and associated services, through to training, industry lobbying, Member Information Nights, media representation and automotive signage, the Association is in a strong postion to support Members - and all available by calling one number P: 1300 MTA NSW

Industry News

Coles to spin off from Wesfarmers under new leadership.

Wesfarmers announced (16-3-18) its intention to demerge its Coles division later this year. The proposed demerger would see Coles’ supermarkets, online, liquor stores, fuel and convenience, financial services and hotel divisions operate as a standalone company, of which Wesfarmers would retain a minority ownership interest of up to 20%.                          

Wesfarmers acquired Coles as part of Coles Group in 2007 and since then has successfully turned around the business and restored its position as a leading Australian retailer. Under Wesfarmers’ ownership, more than $8 billion of capital has been invested in the business across the store network, supply chain and online channel. Long-term collaborative partnerships have been developed with many suppliers.

The proposed demerger is subject to shareholder and other approvals. If approved, the demerger would be expected to be completed in the 2019 financial year.

It is anticipated that the proposed demerger would create a new top-30 company listed on the Australian Securities Exchange, with leading positions in supermarkets, liquor and convenience.

Source: Convenience World Editor, March 16, 2018

Industry News

The ACCC has taken exception with the planned sale of 531 petrol stations Woolworths owns to BP for $1.8 billion, arguing that it would lessen competition and have an impact on petrol pricing. However, the expectation around the market now is that the deal is unlikely to go ahead. With the discussions surrounding the deal stretching out for more than a year, both parties signalled they were prepared to offload some of the service stations — thought to be 130. But the offer has not appeared to appease the ACCC. The Australian newspaper reports on 7 March, 2018 that Global private equity firm Kohlberg Kravis Roberts (KKR) and Petro China are believed to be lining up to buy Woolworths petrol stations in the likely event that the deal with the supermarket group on the table, with BP collapses.

Source: The Australian Newspaper, March 7, 2018

Industry News

Freedom Fuels has acquired Trinity Fuels, which has 18 service stations around Cairns and Townsville. As a result, Freedom Fuels is looking at expanding their Network in the region between Brisbane and North Queensland.

Source: Tropic Now News Alerts, March 9, 2018

Member Spot - Marty Davidson

Ben Boyd Service Station, Eden

As announced on 8 March during the Shell Dealer Conference, it is pleasing to see our Service Station Member in Eden on the South Coast receive multiple awards from Shell for excellent customer service; excelling in sales; and a ten year service plaque as a Shell distributor.

MTA NSW wish to congratulate and say well done to our Member and the proprietor, Marty Davidson and to his hard working staff. It is great to see a member recognised in this way.

Source: Eden Magnet News, March 21, 2018

Caltex to Exit Franchise Mode

Caltex has announced that the outcome of a two-year review into its retail operating model has determined that controlling its core business is essential to achieving their retail growth objectives. Caltex will achieve their objectives by seeking to move all franchise sites to a company operation by mid-2020, as long as all franchisees agree to their offer of transition. This new approach will help Caltex simplify their supply arrangements, provide customers with more consistent experiences and enable Caltex to accelerate change in their convenience retail offer.

Since 1900, Caltex has continually evolved its business strategy. Caltex currently has a mixed model for their network of stores, including 433 franchise stores, operated by approximately 237 franchisees.

Caltex will now work closely with each of their 237 franchisee operators to transition stores to Caltex where the franchisee accepts an offer to reduce the term of their agreement

Where possible, Caltex will offer franchisee employees the opportunity to join Caltex on day one of the transition – they are integral to ensuring the continuity of their business during this time.

Source: Caltex Australia Petroleum Pty Ltd
Head of Government Affairs - email to MTA NSW

Oil Will Remain King by 2040

BP Energy Outlook: Despite growth of Electric Vehicles, oil will remain king by 2040

The 2018 edition of BP’s Energy Outlook published in February this year, considers the forces shaping the global energy transition out to 2040 and the key uncertainties surrounding that transition. The Outlook considers several scenarios and explores the energy transition from three different viewpoints such as: fuels; sectors; and regions.

Transport energy demand growth by only 25% despite total demand for transportation more than doubling, reflecting accelerating gains in vehicle efficiency. The transport sector continues to be dominated by oil (around 85% in 2040), despite increasing penetration of alternative fuels – particularly natural gas and electricity.

This year’s Outlook argues that the penetration of electricity in the transport sector is best measured by considering both the number of electric vehicles (EVs) and how intensively each vehicle is used. In the evolving transition scenario, the share of EVs in the global car park reaches around 15% by 2040 – more than 300 million cars in a car park of almost 2 billion. “The suggestion that rapid growth in electric cars will cause oil demand to collapse just isn’t supported by the basic numbers – even with really rapid growth,” explains Spencer Dale, Group Chief Economist at BP. “Even in the scenario where we see an ICE ban and very high efficiency standards, oil demand is still higher in 2040 than it is today.”

Source: Petrol Plaza Newsletter, March, 2018

Fuel Volumes Hit Coles 1st Half Results

Coles reported revenue of $2,922 million for the first half, 8.1 per cent lower than the prior corresponding period due to lower fuel volumes. According to (parent company) Wesfarmers’ half-year report, the ongoing impact of changes to the commercial terms with its Alliance partner and lower fuel volumes resulted in lower earnings for the half.

Total convenience-store (which includes Coles Express service stations) sales increased 0.9 per cent for the first half, or 0.4 per cent on a comparable store basis. Wesfarmers says growth in convenience-store sales continued to be driven by strong double-digit growth in the food-to-go category, and refurbishment of the store network.

Total fuel volumes for the half declined by 18.6 per cent, with comparable volumes declining 19.3 per cent. As at December 31, 2017, there were 712 Coles Express sites, with 12 new sites opened and two sites closed during the period.

Source: Australian Food News, February 27, 2018

Upcoming Events - Member Information Nights

Around the State Evening Sessions on Industry Issues

  • Young - Wednesday 18th April
  • Newcastle - Wednesday 16th May
  • Bega - Wednesday 20th June
  • Port Macquarie - Wednesday 11th July
  • Lismore - Wednesday 15th August
  • Coffs Harbour - Wednesday 19th September
  • Cooma - Wednesday 17th October
  • Sydney Metro - Wednesday 14th November

MTA NSW welcomes the submission of articles and reproduction within the publication will be at the Editor’s discretion. Email all material to: [email protected] (Supply any images in TIFF, JPG or PDF PC format at 300 dpi, preferably in greyscale only). Material appearing in NOZZLE NEWS is copyright and reproduction in whole or part without the Publisher’s written permission is prohibited. Information on products contained in the text of this newsletter is published in good faith as a service only. It does not imply the endorsement of any product or service by Motor Traders' Association of NSW (MTA NSW). Product claims and specifications in text are those of the manufacturer or advertiser and no responsibility is accepted by the Publishers. Industry information or opinion contained in the newsletter may be subject to regulation, legislation, market variations and industry practices in various states. Such opinion and information is offered for interest only and readers should refer specific questions to MTA NSW Service Station Division or seek independent legal or commercial advice.

EDITOR Anthony Barac-Dunn P: 1300 MTA NSW E: [email protected]
CONTRIBUTOR Colin Long P: 1300 MTA NSW  E: [email protected]

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