BP to buy Woolworths Petrol Outlets

[AustraliaPoochie]

Coles are now very linked to VA, so who knows, Coles and VA might decide to push Coles Express in lieu of BP/OTR (OTR owns a lot of former fuel outlets in SA).

 

[ajw373]

As I mentioned above what has been announced is BP plan to retain their Velocity partnership and Woolworths their Qantas partnership both are very much mutually exclusive of the petrol deal anyway.

With BP the deal with Virgin is direct, and with Qantas it is with Woolworths, not the petrol retailer.

The deal as I understand it is the sale of all Woolworths/Caltex co branded sites to BP with all to be BP branded, eg loosing Woolworths branding. Though Woolworths will team with BP for 16 initially, expanding to up to 200 Woolworths branded convenience stores inside BP petrol stations as well as all BP stations accepting Woolworths discount vouchers.

Woolworths keeps their existing agreement with Qantas and BP keeps their existing agreement with Virgin.

And as for market distortion, whilst there may be some localised distortion, the sale, coupled with BP's existing sites will have less of an overall market share compared to todays Woolworths/Caltex deal.

 

[whatmeworry]

Not happy this deal as petrol price has clearly been manipulated recently.

 

[ajw373]

Not happy this deal as petrol price has clearly been manipulated recently.

So how does this deal make it any better or worse? All it is changing is the dominant fuel supplier from Caltex to BP. Nothing else really changes, except of course Woolworths exiting petrol retailing.

 

[coles525]

My smart and brave opinion if I was the new owner would be to keep both airlines.

The customers choose who they wish to earn points from.

Happy customers, happy servo.

 

[PLANT]

Would be good so that if you forget velocity but have woolies rewards card.... Swipe the same machine!

 

[docjames]

I would be expecting BP to dump Velocity and revert to WW EDR only. The Coles/FB tie-up with Velocity aids this.

The real sticking point will be how much (if any) the ACCC forces BP to give up in the deal.

 

[Cool Cat Phil]

Precisely. BP may have an overlap of accepting both WOW & VA loyalty cards, due to agreements in place with VA, although would only be a limited period of time.
It will be interesting to observe how many outlets BP will be requested to dispose of to gain ACCC clearance.

 

[eastwest101]

It will be interesting to observe how many outlets BP will be requested to dispose of to gain ACCC clearance.

And who will buy the fuel outlets that the ACCC instructs to be disposed of.

If we change thinking to a bulk commodity nett fuel equation in the future - given that Caltex will lose a lot of volume of fuel that currently ends up in Woolworth Petrol sites what will the refining division of Caltex do? Indeed what will the retail division of Caltex do? Remember that Caltex "lost" the bidding war to BP and added to that, Caltex has recently announced buying the NZ Gull Petroleum business so they are looking to diversify out of the Australian market.

 

[Awesom Andy]

One thing we need to keep in mind is that for WW EDR members, the discount "voucher" is tied to the membership card, so for those wanting the discount, they may have no choice in where the points will go to. I don't think Virgin will be happy with that either.

I hardly use these discounts though. There's a (non-WW) Caltex down the road. They don't bother with discounts, but they just offer good prices, very close to or matching the independents' prices. There's no point driving out of the way to save another cent or 2 per litre, and given how popular it is, most locals think so too.

 

[Himeno]

I hardly use these discounts though.

Neither do I. I'd get that same discount without needing a voucher anyway. Not that I need fuel to start with. I'd much rather an option to get more points instead of a fuel discount.

 

[serfty]

...
I hardly use these discounts though. There's a (non-WW) Caltex down the road. They don't bother with discounts, but they just offer good prices, very close to or matching the independents' prices. There's no point driving out of the way to save another cent or 2 per litre, and given how popular it is, most locals think so too.

Of course, these days, on top of the discount, is the Woolies points earn of 1 point per $ at these stations.

 

[codash1099]

One thing we need to keep in mind is that for WW EDR members, the discount "voucher" is tied to the membership card, so for those wanting the discount, they may have no choice in where the points will go to. I don't think Virgin will be happy with that either.

I hardly use these discounts though. There's a (non-WW) Caltex down the road. They don't bother with discounts, but they just offer good prices, very close to or matching the independents' prices. There's no point driving out of the way to save another cent or 2 per litre, and given how popular it is, most locals think so too.

Some interesting commentary on that here:

Shopper docket the sleeper issue behind the Woolworths sale to BP

 

[Moopere]

Honestly, I don't know how BP has managed to stay in business. At least over here in the west BP is always listed in the highest retail pricing on my phone app that tracks fuelwatch and thats before any discounts or shopper dockets might be applied.

Even the VA tie in hasn't helped as its still the most expensive fuel even taking into account the value of FF points. The last BP station I visited ages ago even tried on the CC surcharge, 2% for Amex .. good lord. Taken together, cheaper up front retail price, possibility of shopper discounts and the further possibility of earning WW dollars (QF points) and no CC surcharges (that I've ever seen) the margin between Caltex/Woolies and BP is quite significant.

 

[mannej]

Honestly, I don't know how BP has managed to stay in business. At least over here in the west BP is always listed in the highest retail pricing on my phone app that tracks fuelwatch and thats before any discounts or shopper dockets might be applied.

Even the VA tie in hasn't helped as its still the most expensive fuel even taking into account the value of FF points. The last BP station I visited ages ago even tried on the CC surcharge, 2% for Amex .. good lord. Taken together, cheaper up front retail price, possibility of shopper discounts and the further possibility of earning WW dollars (QF points) and no CC surcharges (that I've ever seen) the margin between Caltex/Woolies and BP is quite significant.

They probably do well off the corporate accounts - I know my organization uses BP as the supplier others would be the same

 

[Moopere]

They probably do well off the corporate accounts - I know my organization uses BP as the supplier others would be the same

Yes, I'm sure thats right. There can't be any real marketplace magic here. Yet, still boggles my mind. If your business/profit sustaining volume is coming from corporate, then why not just add a few percentiles to your bottom line by also offering competitive pricing at the retail end? Unless theres a fear that this would then eat into their corporate figures? You know, the ability to tell big contract customers that they are receiving 30c/litre off the retail price doesn't work if you keep your retail low ... but surely the cost of keeping all those retail outlets open must be enormous?

Big corporates that I know of over here don't buy their fuel from the retail bowser, they buy it literally by the truck load and store it in their own facilities. The discounts are very very substantial, but its not a realistic option for SME or classic retail customers. Perhaps this WW fuel purchase is their way of reentering the retail market in a realistic way that won't cannibalise their contract customers???

Will be interesting to see if the number of retail fuel outlets rationalises somewhat.

 

[exceladdict]

Honestly, I don't know how BP has managed to stay in business. At least over here in the west BP is always listed in the highest retail pricing on my phone app that tracks fuelwatch and thats before any discounts or shopper dockets might be applied.

My motorpass card has 3.75c/l off permanently at BP, 1.5c at all other stations. I seem to always see taxis and WAPOL at my local BP, so I presume they have a similar deal.

Their LPG price also seems to be more competitive than their petrol price, at least a few years ago when I had an LPG car

 

[WeeGraeme]

Honestly, I don't know how BP has managed to stay in business. At least over here in the west BP is always listed in the highest retail pricing on my phone app that tracks fuelwatch and thats before any discounts or shopper dockets might be applied.

Even the VA tie in hasn't helped as its still the most expensive fuel even taking into account the value of FF points. The last BP station I visited ages ago even tried on the CC surcharge, 2% for Amex .. good lord. Taken together, cheaper up front retail price, possibility of shopper discounts and the further possibility of earning WW dollars (QF points) and no CC surcharges (that I've ever seen) the margin between Caltex/Woolies and BP is quite significant.

I think credit card surcharges are a bit of a mixed bag. I've been to BP servos that don't charge Amex surcharge, even thought the majority of servos do around the parts of Brisbane where I tend to travel.

 

[whatmeworry]

ACCC looking into this deal.

BP's bid to buy Woolworths' petrol stations is facing scrutiny from the competition watchdog.
The Australia Competition and Consumer Commission (ACCC) will undertake a public review of the $1.8 billion proposal, but isn't divulging any further details of the probe.

BP's Woolworths buy under scrutiny by ACCC

P.S. Fuel is probably going up in Melbourne today. $1.15 is a good price before any discounts.

 

[clazman]

P.S. Fuel is probably going up in Melbourne today. $1.15 is a good price before any discounts.

Above$1.30 in Perth, some places $1.41

My local BP got bulldozed in the past few weeks