Skip to main content

Corrib protests related to rebranding of Shell and Statoil

The Irish Times
Wednesday, March 19, 2008
Fuelling motorists takes priority
MICHAEL McALEER Motoring Editor
Despite record oil prices, it's the business of refuelling the motorist, rather than the motor, that seems to be driving the decision by Irish oil distributor Topaz to rebrand its network of 350 Shell and Statoil filling stations at a cost of €50 million.
Topaz took control in Ireland of the two established fuel brands over the last two years and recently decided to merge both under the new Topaz brand.
However, its ambitions stretch further than the forecourts. Frank Gleeson, retail director, says that the firm aims to have Topaz stores - without fuel services - opening in town centres in the next 12 to 18 months.
The business model is the reverse of that being operated by the likes of Tesco. Just as the supermarket chain has diversified into filling stations, among other areas, Topaz believes it has the opportunity to diversify from forecourt services to mainstream retail and perhaps other services in the near future.
"We have looked at brands like Tesco. It started in supermarket business and diversified. We see no reason why Topaz as a brand can't diversify from fuel. The problem with using a brand like Statoil and Shell means you can't move outside of that field; it just doesn't work," says Mr Gleeson.
"We believe that one new brand will fit the whole business because Topaz will not be an oil brand but a consumer brand."
There were other influences on the decision to rebrand. The bad publicity surrounding Shell's involvement in the Corrib Gas field, along with a poor record of investment in forecourts in recent years contributed to the decision. "Events in Mayo were part of the mix," says Mr Gleeson.
"The Shell brand was a little bit tired and hadn't been invested in for many years. In addition it had some negative connotations with the Corrib protests, of which it should be remembered that Statoil was involved too; they are also a shareholder in that."
However, it was largely driven by the need to create a brand that is flexible enough to work as a regular consumer brand as much as an oil supplier.
"The forecourt business is changing. We now have to carry more food products to satisfy the convenience needs of modern society. People are getting their daily shop at the local filling station.
"The breakfast roll was the staple product for 10 years in petrol stations but now we are selling wraps and the like. These are bought by females and students. We offer up to 20 hot food items and we're expanding menus all the time."
He cites the fact that at their current chain of filling stations they sell more than four million cups of coffee a year and three million sandwiches. "That's a phenomenal amount of food products," he says.
The new Topaz offering is already on display at the firm's two new flagship forecourts, at Citywest and Dublin Port.
The latter is the first new filling station to be opened in the city centre for several years and offers services such as free wi-fi, laundry and shower facilities and a truckers' lounge. It's a model of what Topaz hopes to offer in its new Greenfield sites, which may include the service areas proposed on the M1 and M7 motorways. Sadly for motorists, fuel prices at Topaz filling stations are unlikely to fall.
"Fuel is the least profitable thing we sell in our stations. Below-cost selling is happening already in the market and some players are more aggressive because of their ability to use that position to drive unsustainable price levels. We're not on that model, but in the model of added value," says Mr Gleeson.
While he won't be drawn on the finer details of Topaz's strategy, he does say the firm will try to tap an increasing environmental awareness by motorists.
First to go will be Shell's range of V Power fuels aimed more at performance than green motoring. This is likely to be replaced with fuel offerings that include five per cent mixes of ethanol.
EU rules already allow blends of up to five per cent in regular petrol and diesel, without a danger to the car's warranty. "A 5 per cent ethanol mix runs in every car, but I don't think consumers know that," says Mr Gleeson.
Topaz also plans to introduce E85 blended biofuel - made up of 85 per cent ethanol and 15 per cent petrol - for use in biofuel vehicles, but this will mainly be in its new sites.
As for controlling the pricing of the 250 independently-owned service stations that fall under the Topaz brand, he says that, even if it wanted to, it could not control the prices as such a move would be judged anti-competitive.
However, if there is price-gouging by independents in the brand Gleeson says they will "tell people to look elsewhere in their locality for better prices".
"The Shell brand hadn't been invested in for years... and had some negative connotations with the Corrib protests
© 2008 The Irish Times

Posted Date: 
26 March 2008 - 11:23pm