The decision followed MFG's acquisition of Murco's retail business on October 1, 2014, comprising 228 company-owned forecourts, and agreement to supply a dealer network of more than 200 additional sites. Prior to this deal, MFG owned 49 BP-branded sites and 10 which traded under the Jet brand.
The latest move involves replacing the Murco brand on its newly acquired 228 sites, with BP and Jet, as well as introducing the Texaco brand to the MFG network.
From the start of April, BP fuel supply commenced at 136 MFG sites (previously 49); while Jet now delivers to 68 sites (previously 10); and Valero has started supplying Texaco fuel to 78 stations. Station rebranding programmes are already underway and are expected to be completed by the end of the second quarter this year.
Jim Mulheran, MFG's fuels director, said: "Following exhaustive and detailed negotiations we are delighted to have these three strong fuel brands throughout the MFG company station network. Together they give us supply, price and image flexibility which means that we can maximise the offer to motorists in each and every location that we operate."
MFG managing director Jeremy Clarke added: "This is a great deal for us and for our customers. However, it does not mean that the Murco brand will disappear. We now have the opportunity to put more emphasis and time into Murco as an exclusive dealer brand."
He said that since acquiring Murco's dealer network he and his dealer team, headed by Paul Almond, have been developing a plan to relaunch the offer to the UK dealer marketplace.
He said: "Our 200-plus strong dealer network is very important to us and is a market that we understand very well. We all worked closely with dealers while at Murco and our experience at MFG, which in itself is a large group dealer, has allowed us to really understand the needs of this section of the market.
"We are giving our dealer business exclusivity to the Murco brand and along with this will be actively looking to grow the Murco network with a package which combines flexible delivery arrangements and a new, positive method of offering our dealers some very attractive trading terms.
"We can tailor our fuel supply arrangements to meet the individual needs of a customer, contribute towards forecourt or shop development projects and strongly believe that we can match, if not beat, any supply arrangements offered in the marketplace today.
"So, if dealers are looking for unmatched fuel supply and service with new, attractive and flexible trading terms from a dedicated team with a dedicated brand, then it has to be Murco. Paul Almond and his team will be delighted to hear from any dealer looking for a fresh approach to fuel supply."
The three companies which took over supplies to MFG all welcomed the biggest fuel supply deal of recent years. BP said its deal involved in excess of 500mlpa of fuel and it would convert sites migrating to the BP brand over a three-month transition period.
Howard Nunn, BP's UK sales manager, said: "I am delighted with the further acquisition of 87 sites to the BP network through our strategic partnership with MFG as well as re-securing their existing network for a further five-year term. This highlights the deep relationship between the two organisations and we look forward to exploring further areas to support MFG with their long-term plans."
Jim Mulheran said: "We are extremely pleased to have reached agreement to significantly increase the number of BP-branded stations across the MFG network. I think the strength of the BP brand is well understood and we have developed an excellent working relationship with them."
Andrew Cox, Valero's sales and marketing director, said the company had already added 140 new sites in the past two years, and the additional 78 sites would mean Valero will supply over 850 Texaco-branded service stations in England and Wales. Fuel supply at the MFG sites commenced at the end of March and all sites are due to be Texaco-branded by mid-July
He said: "We have a very attractive offer competitive price; industry-leading supply that is secure and reliable; a good credit card offer; a recognised brand; and we are good people to do business with." Cox said Valero had made significant investments in its supply chain, re-opening the Manchester Terminal and re-commissioning the northern leg of the Mainline pipeline connecting Manchester to its Pembroke refinery, giving security of supply and capacity for growth. He added that he hoped to take the total number of sites supplied to 900 in the next year.
Jim Mulheran commented: "The strength of the Texaco brand, especially in Wales and the South West, together with Valero's seven days a week delivery service, were key features in our decision-making process. The introduction of Texaco to the MFG network is a welcome addition as it brings additional brand flexibility enabling us to provide the right products, at the right prices, to all of our customers."
The original 10 MFG sites supplied by Jet are spread from Southampton in the south to Glasgow in the north, while the additional 58 sites are located throughout Scotland, Humberside, Yorkshire, Midlands and the South East. The bulk of these new sites are supplied from Jet's supply points at Immingham, Kingsbury and Thames, and all sites are due to be re-branded by the end of May. Jim Mulheran commented: "Our relationship with Jet stretches back to 2011 and since then we've established a very positive working partnership. We've been consistently impressed with how Jet operates and, based on the success of previous contracts and a competitive supply deal, the decision to choose Jet as our supplier for these additional sites was an easy one. We're very much looking forward to working with Pete and everyone at Jet over the next five years and beyond."
Pete George, managing director of Phillips 66 UK & Ireland marketing, added: "We've made no secret of our plans to expand our network setting a target of 400 sites by 2018 so to win a quarter of MFG's available sites is a real coup for everyone here at Jet. This latest win takes the total number of Jet sites to more than 350 and with further site wins in the pipeline, it's a very exciting time for our network.
"MFG is without doubt one of the largest and fastest-growing independent fuel operators in the UK and as it continues its own expansion plans, we will certainly be delighted to be part of any further growth. The way MFG operates very much complements our approach to business. We hope that this latest win demonstrates that Jet is a strong supply partner and is 100% committed to the future of the UK fuel retail market."
Going for growth
Motor Fuel Group (MFG) was already fifth in the Forecourt Trader Top 50 Indies when it was bought by its current owners in December 2012.
Directors Sej Sejpal, Sharad Raja and Tony Head had built it up to a group with 58 stations situated throughout the UK operating under the BP, Shell, Texaco, Esso, Total and Jet brands.
Private equity fund Patron Capital bought the company in a joint venture with a new management team backed by oil industry veteran, Alasdair Locke.
Following the deal Murco's then retail marketing director Jeremy Clarke moved to MFG as managing director, taking other Murco executives with him, including dealer sales manager Jim Mulheran.
Over the next two years the company invested £1.5m in a refit programme, introducing Costcutter and Costa Coffee, and rationalising its fuel supply arrangements down to deals with BP and Jet
In the summer of 2014 MFG's owners agreed a deal to buy Murco's retail business, comprising 228 company-owned forecourts and supplying a dealer network of more than 200 additional sites. The deal completed on October 1.
In the latest Forecourt Trader Top 50 Indies, published last month, MFG had climbed to second place with a total of 288 company-owned sites, although Euro Garages, with 182 sites, will be snapping at its heels when its deal to acquire 104 Esso stations closes later this year.