DCC Energy has moved swiftly to reassure Total dealers about its commitment to their businesses, and a seamless transition once the acquisition from Rontec is completed.
The initial, rather negative, reaction by Total dealers to the news that their contracts would be moving from Rontec to DCC, announced last month, was received with great alarm at DCC HQ. It prompted Donal Murphy, managing director of DCC Energy, to issue the following statement: "The acquisition of Pace, the pending acquisition of the Total dealer network, confirms our commitment to the UK retail dealer sector."
Dealers had expressed understandable concern about the lack of any information at all from Total about the developments, and what might happen to the Total brand. They were also aggrieved at the absence of any consultation, and the subsequent lack of control they felt, bearing in mind the impact it could have on their businesses. They were upset about being passed from pillar to post. After all, just a few months before, Rontec had agreed to acquire the UK Total business. While digesting that news and before the deal has been completed, agreement was then reached to sell the Total dealer business on to DCC.
Both acquisitions have yet to be completed, although, despite the Rontec acquisition being considered by the Office of Fair Trading, completion, at the time of going to press, is said to be "imminent".
Total dealers were also concerned about DCC as a company about which they know very little. Hence a letter of explanation was sent out to them (see right) and an FAQ document (see below) prepared.
"If Total dealers have felt short-changed in recent months, then their wait for something better will shortly be rewarded," says Keith Jewers, director of Gulf Retail.
Q1: Has GB Oils bought all the Total dealer sites?
DCC plc, the sales, marketing, distribution and business support services group, has reached conditional agreement with Rontec Investments LLP (’Rontec’) to acquire certain oil distribution assets currently owned by Total in Britain, the Isle of Man and the Channel Islands (’the Acquired Businesses’). Rontec reached conditional agreement in June 2011 to purchase the Acquired Businesses as part of a larger transaction with Total. DCC’s acquisition is conditional on Rontec completing its transaction with Total, which is expected to take place in late 2011.
Q2: What does this mean for GB Oils?
This is a step change for the GB Oils retail business and demonstrates our commitment to accelerate and develop our presence in the retail market.
We are 100% dealer focused and committed to growing and developing petrol retailing with our current and future dealer partners. We look forward to welcoming all the Total and Power dealers to the GB Oils family.
Q3: Is retail a core business within GB Oils?
Yes, we are very much interested in the retail market. While historically we have been primarily involved in fuel distribution, we have always supplied retail sites and this represents a significant and very exciting opportunity for us. Unlike many suppliers at the moment, we are 100% dealer focused, and as such have built up a comprehensive supply and logistics capability across the UK.
With the Gulf brand we have enjoyed rapid growth with more than 300 Gulf-branded sites, and we see very real scope for further growth in this market. We see ourselves as offering a new and dynamic option for all dealers.
Q4: I have a fuel contract with Total, what does this mean for me?
Subject to the completion of the deal, these contracts will pass to DCC and GB Oils. We will have comprehensive arrangements covering the delivery of fuel through to its invoicing. These arrangements will be confirmed closer to completion but we are working with the aim of making the transition as seamless as possible. To this end, for a short interim transitional period Rontec Watford Limited (a subsidiary of Rontec) will take over the management of Total’s existing back office administrative services as the business is transitioned from Total, which will ensure that there is no disruption in business operations as a result of the change of ownership. This may mean that for this short period some dealers will receive invoices in the name of Rontec Watford Limited (acting as agent for DCC).
Q5: What will happen with the Total brand?
Arrangements are in place to keep the Total brands in place for the lifetime of the current contracts. Therefore, no immediate branding change is planned or required. We can extend, or re-sign, existing dealers for up to three years from the date of completion of the acquisition.
GB Oils obviously has a suite of brands, for example Gulf, which we are very excited about and over time we will look to adapt our branding strategy accordingly.
Q6: Will I still have the same account manager?
Yes, you will. All existing Total field staff will continue to service their dealer partners/customers and will continue to remain the point of contact going forwards.
Q7: Will the price of my fuel go up?
Any changes in fuel price will not be as a result of this change. All pricing mechanisms within the contracts remain the same and letters will be sent to all dealers confirming assignments of the current contracts. This process has been agreed with Total.
Q8: What about my fuel cards?
There will be no change to fuel cards on completion of the deal. As part of this agreement, the Total fuel card packages will remain. The contracts, as agreed with Total, will remain in place for a period of time. Going forward GB Oils will be looking to use its strength and leverage to create improved fuel card offers across the whole of its retail network. This will encompass Total and our other brands as well.
DCC energy LETTER TO TOTAL DEALERS
Further to recent announcements, you may be aware that DCC Energy has reached agreement to purchase some of Total’s marketing and distribution assets including its dealer business from Rontec Investments LLP (’Rontec’). Whilst we are limited to what we can say until the transaction formally completes, we would like you to know that our planned acquisition has been carefully thought through and we are very excited about the opportunities this presents.
Our immediate priority is that you continue to receive high levels of service and accordingly we have put in place a number of arrangements to ensure continuity.
We have considerable experience in managing transitions smoothly and effectively and have arrangements in place to keep the Total brand at all locations for at least the lifetime of all current agreements (with the possibility of an extension if the remaining term of your current agreement is less than three years). In addition, any contract that is free of tie or approaching expiration of their existing agreement will also be given the opportunity to re-sign under the Total brand (with certain conditions surrounding the contract period). This will minimise disruption for you and your valued customers.
Similarly, there are no plans to alter fuel-ordering procedures, delivery arrangements or your fuel card package. In time we will look to enhance these services, where possible. To this end, for a short interim transitional period, Rontec Watford Limited (a subsidiary of Rontec) will take over the management of Total’s existing back-office administrative services as the business is transitioned from Total, which will ensure that there is no disruption in business operations as a result of the change of ownership. This may mean that for this short transitional period some dealers will receive invoices in the name of Rontec Watford Limited (acting as agent for DCC Energy).
If you don’t already know much about DCC Energy and its UK arm GB Oils, we are the largest independent oil distributor in Britain, supplying fuel to over 950 petrol retailers, all of whom benefit from secure supply and distribution arrangements. Our long-term commitment to dealers throughout the UK, is supported with more than 200 depots and a fleet of more than 800 tankers, and we see retail dealer businesses as a major area for growth.
Through Gulf (www.gulfoil.co.uk), GB Oils has created a growing presence with an iconic international brand operating in over 70 countries with over 50,000 employees. With a strong association to motor sport, Gulf is focused on quality, innovation and attention to the needs of the market it serves.
Supply to dealers is an integral part of the GB Oils business and a core objective to further develop in the future, but this can only be achieved through developing and maintaining strong working relationships with our partners. With that in mind we are delighted to be given the opportunity of working with you in understanding your business, the challenges that you face and collectively developing opportunities that would be mutually beneficial to both companies going forward.
We at DCC Energy and GB Oils look forward to welcoming you alongside a company that very much understands the needs of dealers. We appreciate that some of you may not be that familiar with DCC Energy or GB Oils, though many of our trading brands are household names so we attach an appendix with some facts and figures on the organisation.
We will now work to ensure a smooth transition whilst keeping you informed at every stage along the way. For all updated and ongoing developments you can refer to your existing retail team.
We warmly welcome you to the GB Oils family and look forward to developing enjoyable and effective business partnerships together
We look forward to welcoming you formally in due course.
DCC Energy and GB Oils Ltd