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Call to curb ‘supermarket squeeze’ on Westcountry independent petrol retailers

By Exeter Express and Echo  |  Posted: January 06, 2014

Petrol
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The future of independent petrol stations in the Westcountry is under threat unless something is done to curb unfair tax policy and supermarket competition, according to a leading industry figure.

According to the Petrol Retailers Association, many independent petrol stations are being squeezed out of the market, partly by supermarkets’ cut price deals to attract customers to their stores.

There are 58 fewer independent forecourts in Devon and Cornwall than in 2007, according to figures from the association, while there are 11 more stations operated by one of the big four supermarkets.

The number of petrol stations operated by oil companies have also fallen by six over the same period.

Brian Madderson, chairman of the Petrol Retailers Association, said there were two main reasons why small independents were under such pressure.

“One is the unfair competition from the supermarkets, who basically use fuel as a loss leader to attract people in to the stores,” he said.

“This has already been recognised in Australia as being bad for customers in the medium to long term as it is going to cut our choice. The second reason is that the Government is still dictating that the small rural independents have to pay their tax on fuel virtually as the tanker arrives.

“I don’t know any other business which has been so impacted by Government policy.

“The regions are really going to find it very difficult (unless something changes).”

According to figures from the Petrol Retailers Association, the number of independently-owned petrol stations in Devon has fallen to 145 from 181 in 2007. In Cornwall, that number has slipped to just 82 from 104 six years ago.

There are now 52 petrol stations owned by one of the big four in the region, up from 43 in 2007. However, the amount of petrol stations overall has fallen to 308, with an overall reduction of 20% in small retailers across the whole of the South West.

Mr Madderson said people living in rural areas will see fuel costs go up as they drive further to fill their tank.

He said: “The real issue is that local area councillors and planners are seduced by the overtures of the big four grocers to provide jobs and better facilities for tourists and local residents and businesses.

“Too seldom do they stop to consider the impact of a new out-of-town store with a forecourt on existing petrol filling station in the local area.”

He is recommending to the Government that fuel stations run by big supermarkets should not sell fuel below cost price subsidised by high margin store goods.

He added they should also not employ deep discount tactics such as offering discount off petrol if so much is spent in store and that they should agree a “voluntary” fuel price curb. Elsewhere, he said fuel duty should be able to be deferred with nil security to improve cash flow of smaller stations.

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  • nick113  |  January 06 2014, 6:49AM

    No-one likes competition when they are on the receiving end of it, but what Mr Madderson is actually saying is that supermarkets should increase the price of their fuel so that his members can make more profit. Well la-di-da!

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