With the future of the Petrol Retailers’ Association (PRA) under review, the organisation could be looking at its first major shake up in years. Last month PRA director Ray Holloway revealed
in Forecourt Trader that the Retail Motor Industry Federation (RMIF) was conducting a business review of all the eight trade associations under its wing. The RMIF, parent body of the PRA, was believed to have been wanting to move away from the fuel side of the business for some time - which had created internal sqabbling and even prompted some retailers to withold their membership fees. There were also rumours that Holloway had quit, although these were quashed by the man himself. The industry was told to expect a decision on the future direction of the PRA by the spring.
Holloway said that while this direction was uncertain, in the meantime he and the PRA needed as much input from retailers as possible. So what do members - and non-members - want from the PRA in 2009 and beyond?
Phil Richardson, who runs Park Garage Group and was president of the PRA for three years, said a major change was needed because the PRA had become a voice of the industry rather than the voice of retailers. He said: "I think the PRA should be firmly on the side of retailers - but we don’t seem to have any representative body at all. The PRA doesn’t help retailers with their problems, it doesn’t fight the oil companies or fight on the retailers’ behalf politically. When you hear the PRA being interviewed it is mainly about oil prices. You don’t hear it talking about how retailers are suffering.
"In addition, the executives of the PRA haven’t changed for years, and if you don’t get fresh blood into an organisation like that then what’s the point? I think the PRA needs to change radically - it’s a bit of an anachronism. I would say there are some good bits of the PRA. It has given retailers support with things like stage II vapour recovery - but its strengths are mostly on the technical side of running a filling station, not the political side of things.
"I would love to see a lively PRA like in the days when it got involved in firing guns at the heads of oil companies - it had some notable successes. I think lots of the problems have to do with the passive leadership at the PRA. It needs teeth and strong leadership; and needs to make its voice heard on retailer issues - in short, it needs a total makeover."
Phil said he would like to see an independent PRA that moved away from the RMI. He added: "I think the RMI has a different agenda. The PRA should be fully independent and should stand alone. At the moment it’s dying on the vine. It needs to be born again and to be an organisation that members can contribute to. There needs to be a sea change."
PRA chairman Peter Brough, who runs Manor Service Stations, said he would like to see the association representing far more retailers. This included increasing the membership among the Asian community as well as motorway service stations. He added: "I think the PRA is essential, we don’t know what the oil companies are going to do in the next few years and we need to be there to represent the retailers, especially as some of the global oil companies may well exit the UK - who knows? In the longer term I’d like it to become more like in the US where it could act as a buying group. It needs to be much stronger and more cohesive. But we can’t do that until we get more members." According to Peter, the PRA has an official membership of between 600 and 800 but it is estimated that there are an equal amount of other businesses in the RMI that the PRA services but that don’t pay towards it directly.
Regarding staying with or leaving the RMI, Peter said the key first lay in attracting more members and finance - that way if the situation arose where a decision had to be made then the PRA could be independent. He admitted it needed a change, adding: "We need members to tell us what they want - it’s their association. I’d also really like it if non-members got in touch to tell us why they aren’t members. All views are welcome!"
Peter said the benefits far outweighed the membership fee, with benefits including the group’s deals with banks and insurance companies and help with dealing with legislation. He added that this was his eighth year as chairman and he was keen to pass the baton onto someone with new ideas. He also wanted Ray to continue in his post, describing him as "a terrific spokesman for the industry, extremely knowledgable and very experienced in dealing with the oil companies". In addition, he would welcome a "loose association" with many other organisations, including the Association of Convenience Stores (ACS) and even the AA. Other retailers agreed there needed to be a shift of focus at the PRA. David Charman, who runs Parkfoot Garage Group, said independent retailers needed more representation. David, who is not a PRA member, explained: "We need a voice that puts our situation across at times of interest to consumers as well as when there are problems. I think that’s vital. But it needs to be representative of independents retailers."
Mark Wilson, operations manager at the Fraser Group, said there needed to be more support for the shop side of the business. He said: "Given where retailers make most of their profit, I think the PRA needs to align itself closer with the ACS. We are finding ourselves more in line with the ACS than the PRA - we are members of the PRA but we don’t use any of its services. There are companies out there that the PRA could align with which would be very beneficial to retailers."
Meanwhile, the supermarkets look unlikely to come on board. According to Phil Maud, Morrisons director, petrol filling stations, the supermarkets are a different market to the independent retailers and need their own organisation to reflect this. Morrisons is one of the members of the Association of United Kingdom Oil Independents (AUKOI), a body which represents both independent retailers and independent suppliers. Maud said Sainsbury’s, Tesco and Somerfield were also members along with oil companies like Harvest Energy.
He added: "AUKOI meets with the PRA about twice a year to discuss issues such as security, drive-offs and legislation, but it’s a totally different organisation." He added that Morrisons wouldn’t therefore become a member of a revamped PRA, but acknowledged a need for a rethink. He explained: "I can see why the PRA is looking to have a review, There’s a lot of consolidation in the market and some of the larger dealers may well be looking to move away from the main oil brands. A frustration of AUKOI is that many members feel the PRA’s views on supermarkets are unfair. We’re simply efficient in managing costs and supply. I think Ray needs to recognise that we are independent like his members - we can buy fuel from who we want.
"I don’t think Ray’s media profile is really representative of where retail is now. More than 50% of the fuel volume in the UK is sold through supermarkets or company-owned sites. I’m not sure the PRA is an appropriate voice for the industry in its current form."
=== A history of the PRA ===
1902: Frederick Simms creates The Society of Motor Manufacturers and Traders (SMMT).
1913: A group of motor traders break away from the SMMT to form the Motor Agents Association (MAA). Its four key divisions cover cars, commercial vehicles, motorcycles and petrol.
1987: The Petrol Retailers Association (PRA) is established. Its first director is Geoffrey Atkinson. John Lowe of Thames Petroleum is named chairman.
1990: The MAA becomes the Retail Motor Industry Federation (RMIF).
1991: Jamie Campbell, Inchcape Limited, named chairman.
1993: Phil Richardson, Park Road Group, named chairman.
1995: Paul Sykes, Shaw Petroleum, named chairman.
1997: Ray Holloway becomes executive director of the PRA.
1998: David Maxwell, Maxwell Group (Northern Ireland), named chairman.
2000: Bill O’Dell, Sheerwater Motors, named chairman.
2002: Peter Brough, Manor Service Stations, named chairman.
=== Membership benefits ===
The PRA says it is committed to helping members run their businesses legally and more profitably, and to adapt to new challenges in the market through advice and support, representation and high-profile campaigning.
It is the only trade association representing the requirements of all types of independent forecourt owners in the UK. Forecourt retailing is one of the UK’s most regulated industries with onerous penalties for non compliance, therefore having the PRA participate in drafting new or replacement legislation and regulations is critical in protecting the interests of individual businesses.
Advice to members is freely given on key issues, including:
l Supply contract negotiations
l Dispute resolution
l Legal support via expert witness input
l Fuel cost price discrepancies and claim management
l Every technical requirement for operation of a legal forecourt business
l Biofuel and other fuel quality issues (storage and potential stock losses)
l Heath and Safety Regulations
l Mandatory staff training
l Assistance in using BigOil.net (Platts fuel price quotes)
l Expert opinion on all fuel industry issues
l Equipment replacement and maintenance
l Guidance on key relationship interaction (eg Trading Standards)
l Crime and business protection
Members get a range of specifically tailored and cost-saving benefits such as specific insurance (including environmental cover), reduced banking costs, including credit and debit card transactions, equipment discounts, free legal helpline and free general advice helpline.
The PRA’s objective is to make sure the cost of membership is outweighed by the savings available from participating in the benefits programme. It delivers a series of Regional Business Forums annually to brief members on key issues and provide expert guidance on day-to-day problems.
A strong relationship with the media allows the PRA to keep the industry and the many issues it faces in the public eye.
Successes gained on behalf of members are maintained in confidence but financial reimbursements via compensation payments have often been at a level of five-figure sums and the PRA’s intervention has frequently prevented an authority from pursuing legal action against a fuel business. It supports retailer disputes with fuel suppliers - in a recent contract dispute a retailer was awarded up to £70,000 in compensation. It also acts as a mediator and has been involved in several cases where it has got retailers released from contracts without onerous penalties. It was also heavily involved with the recent dispute with Arval.
And finally, many members join the PRA to give them access to face-to-face discussions with other retailers.
Source: The PRA