BP to buy Woolworths Petrol Outlets

[eastwest101]

Strange that no-one has posted on this transaction, basically BP will be buying the WW Petrol Outlets with the 4c per L fuel discount continuing and presumably the QFF earn and burn continuing as well.

Caltex disappointed with Woolies-BP deal

I didn't link to the article in The Business Australian because its paywalled but there is an interesting conclusion that this deal is good news for BP/Brad Banaducci and good news for the Woolworths group but the journalist concluded this would be bad news for Velocity, without any reference as to why.

So lots more fuel volume for BP and less for Caltex (whom seem to be left without a partner). Will be interesting to see if the ACCC steps in and we see a lot more movement in the ownership of petrol stations in the future.

Could we see Caltex try to cosy up to Aldi in the future? Will Shell stay aligned with Coles and Flybuys?

 

[exceladdict]

I presume the caltex-owned outlets will discontinue the 4c/l discount, but it be retained at the ex-wow owned sites, which will be a shame as the majority in perth (near me anyway) are the former.

My main thought is that this would have been the final nail in the coffin if caltex refining wasn't already sent offshore.

Will also be interesting to see what happens with the motorpass discount that's currently available at BP outlets and if/how it interacts with the wow 4c/l discount.

Who supplies Puma/7-11/other independents?

 

[codash1099]

Here also:

Woolworths sells fuel business to BP for nearly $1.8b - ABC News (Australian Broadcasting Corporation)

It will be interesting to see how they sort out the conflict between WW/QF on the one hand and BP/VA on the other.

 

[eastwest101]

Who supplies Puma/7-11/other independents?

Don't know the answer to your other questions but Puma is a privately owned company owned by Trafigura (Swiss/Dutch owners) and Angolan Sonangol Oil - fuel all imported so no local refinery. With the closure of much of Australian based refiners we will see more exchange rate volatility in the price of fuel depending on what the AUD does. Looks like 7 Eleven use mostly Mobil products (local Altona refinery).

Anyway - it will be interesting to see if BP having captured a lot of Woolworths EDR related traffic continue to partner with Velocity. Probably a good deal for BP as they will soon be able to be always 4c/L more than their competitors and will be able to rely on data and loyalty/discount scheme all from Velocity and from Woolworth EDR to drive traffic through their outlets leaving Shell with the Coles & Flybys partners.

 

[serfty]

Woolies points will be earned across all BP stations including those currently providing Velocity points.

I can't see Velocity being a part of it going forward... Maybe VA will do a deal with Caltex.

 

[PLANT]

What about Myer one?

 

[codash1099]

What about Myer one?

Not much petrol available there

 

[moa999]

Problem is BP historically in my view has been the most expensive. Lots of well located outer CBD sites but you pay for it.

The Caltex sites generally matched local competitors before the discount

 

[I love to travel]

Problem is BP historically in my view has been the most expensive. Lots of well located outer CBD sites but you pay for it.

The Caltex sites generally matched local competitors before the discount

Agree, especially in brisbane this is very true

 

[serfty]

Report on ABC that Velocity will still be able to be earned at BP stations, at least for the short term.

I am thinking that may be contractual.

 

[Virgin Bart]

Agree, especially in brisbane this is very true

And Melbourne and regional Vic.

 

[oz_mark]

Report on ABC that Velocity will still be able to be earned at BP stations, at least for the short term.

I am thinking that may be contractual.

The deal is not expected to close until 2018 (and is subject to FIRB and ACCC aprovals), so at least a year away before anything much happens. And who knows what the ACCC will say.....

 

[Cool Cat Phil]

Report on ABC that Velocity will still be able to be earned at BP stations, at least for the short term.

I am thinking that may be contractual.

I would suspect only until BP gains full ownership of the Woolworths owned outlets which is not slated until 2nd January 2018 (at the earliest)

 

[WeeGraeme]

BP buying Woolworths Petrol - Which FF prog will they stay with?

It was announced today that BP is to buy Woolworths Petrol. Given that BP has an arrangement to earn Velocity points and Woolworths earns QFF points, it'll be interesting to see what happens in that regard.

 

[mannej]

Re: BP buying Woolworths Petrol - Which FF prog will they stay with?

This is a duplicate thread

 

[pauly7]

Well Velocity will still be linked with Shell via Flybuys I suppose

 

[WeeGraeme]

Re: BP buying Woolworths Petrol - Which FF prog will they stay with?

Sorry. Indeed it is.

 

[moa999]

Plenty of petrol to flow under this bridge

 

[Cool Cat Phil]

Strange that no-one has posted on this transaction, basically BP will be buying the WW Petrol Outlets with the 4c per L fuel discount continuing and presumably the QFF earn and burn continuing as well.

Caltex disappointed with Woolies-BP deal

I didn't link to the article in The Business Australian because its paywalled but there is an interesting conclusion that this deal is good news for BP/Brad Banaducci and good news for the Woolworths group but the journalist concluded this would be bad news for Velocity, without any reference as to why.

So lots more fuel volume for BP and less for Caltex (whom seem to be left without a partner). Will be interesting to see if the ACCC steps in and we see a lot more movement in the ownership of petrol stations in the future.

Could we see Caltex try to cosy up to Aldi in the future? Will Shell stay aligned with Coles and Flybuys?

My observations,

This transaction has been widely speculated in the retail industry for quite sometime, although only discussed in the media briefly.

I suspect BP may face a few hurdles such as disposing of a handful of outlets where the ACCC deems the acquisition by BP to reduce competition in some geographical areas. But other than that, BP most likely will gain regulatory approval.

Observations that many people have made that BP are uncompetitive with pricing is certainly apparent in many cases, and Woolies will need to ensure BP are in fact price competitive, otherwise consumers will vote with their feet with their supermarket shopping.
The 4 cent a litre discount doesn't win over all supermarket customers, but certainly drives consumer behaviour of an important component of the customer base.

The ability to earn Velocity points at BP will continue for the short term, although will cease upon completion of the Woolworths acquisition ( early 2018 most likely)

Aldi certainly won't establish an deal with any petrol retailer- that is a certainty as their business model doesn't support those type of discount activities.

Coles Express/Shell will continue with flybuys. Before Coles purchased the petrol stations from Shell in the early 2000's, shell was a cornerstone partner of flybuys way back in the early 1990's when what was then known as ColesMyer established Flybys.

The sale of Woolworths petrol outlets certainly allows Woolworths to repair the balance sheet and invest in the supermarket business.
This may assist Woolies to invest in some very serious price competition and investment in some very tired stores they have in their estate.
However, the loss of revenue from petrol retailing will certainly be noticed on the Woolworths books, and will certainly cement Coles with the largest source of retail sales in Australia.
But on the other hand Woolworths petrol Volumes have been in decline for some time now partly due to more fuel efficient cars on the road, so Woolies may indeed be selling off a business that will continue to spiral backwards.

 

[ajw373]

Re: BP buying Woolworths Petrol - Which FF prog will they stay with?

It was announced today that BP is to buy Woolworths Petrol. Given that BP has an arrangement to earn Velocity points and Woolworths earns QFF points, it'll be interesting to see what happens in that regard.

Actually Woolworths is selling their petrol stations to BP, not changing supplier of fuel. Also been announced that the Velocity deal with BP remains, so too does Woolworths deal with Qantas.