Forecourt Trader - 30 years at the heart of the fuel retailing community

We did nothing wrong

01 September, 2003
Two retailers give their reactions to the judgement in the Esso trial
Page 27 
Shailesh Parekh is one of the most high-profile of the former Esso licensees involved in the trial, and has become something of an unofficial spokesman for the group. He’s not afraid to speak his mind, as he has demonstrated in the various public protests he has been involved in, his many contributions to Forecourt Trader, and his appearance on Channel 4’s consumer programme Joe Public. He is absolutely furious about the outcome of the trial so far, and from his Midlands-based Texaco site that he now operates, he has no doubt that the retailers were right to take on Esso in court.
“Most normal human beings don’t pick a fight with the world’s largest corporation,” he says calmly. “And when I did so it must have been that I felt so wronged. But taking into consideration the size of the adversary against the degree of its wrongdoing to myself and my fellow colleagues, we still went ahead.”He is particularly angry about the fact that prior to the trial Mr Justice Moore-Bick had ruled that all the separate actions that were taking place up and down the country should all be brought together into the commercial court, and a once-and-for-all decision would be made.“He also said he would decide on the principal issues, but not the quantum,” says Shailesh. “On this he would provide a formula. He clearly has not done so. The retailers and Esso have achieved absolutely nothing as a result of this trial. The situation – with the exception of the ‘hot fuel’ argument – is still unresolved. Retailers have been invited back to the county courts on the Tiger Tokens and Partnership Licence issues, which is exactly the same situation as before. “The only choice for retailers is to pay up their proportion of the costs or go to appeal. Not much of an option.”The fact Shailesh is in this situation at all is by a curious twist of fate. His ancestral trade is jewellery – he has a BSc in mineral processing and metallurgy; and he used to have a factory that made copper, silver and brassware. Then he emigrated to England from Africa during the recession of the early ‘90s and couldn’t get a job as an engineer, or even as a jeweller. He was really desperate to work and took a job on a Texaco service station. After eight months, the area manager offered him his own site. Two years later and, ironically, it was problems at Texaco that led him to Esso. Management changes meant the arrival of Louise Nemanich who quickly gained a reputation for her ruthless destruction of the Texaco network: “When she came along I could see the writing on the wall,” says Shailesh. “So I went from the frying pan into the fire – I went to Esso!”He signed up for a three-year Esso licence on Ablewell Service Station in Walsall, West Midlands, in December 1994. However 18 months into the contract (when Nemanich went back to America from where she came) Texaco contacted him to take his former site back – “which I did because I had seen the writing on the wall with Esso…”.“I’ve been with Texaco ever since and had no problems with the company – it’s all very straightforward.“I did stick with the Esso business through the contract, but the problem was there was no money in it. I had borrowed money from my dad to finance that business and Esso took it away. I didn’t even earn enough to live, so that’s how I ended up having the Texaco site as well.”When Shailesh took over the Ablewell site he said he had never worked harder in his life – doing nine years’ work in three years. His shop and fuel sales grew by 50 per cent yet his income reduced; while Esso expected him to grow the business and operate with a wage cost he had when he first took over the site. The squeezing continued and included the introduction of new operating procedures under the heading Business Process Redesign (BPR) and an effective rent increase of £14,000 per annum. He was also debited thousands of pounds for the winding up of the Tiger Token scheme (he owes £16,000). Then he began to fight back.FIVE YEAR BATTLE It’s been a long, five-year battle, and he believes that justice has still not been served: “Most of us had tried to reason with Esso. Perhaps they were experimenting with the new BPR regime and we were just the guinea pigs. After I left the site, I discovered that the effective rental increase that I had had to endure was reduced for the new operator of the site, and that just proves my point – that I was being made to perform an impossible task. That means Esso’s experiment failed. It means what the company did was unreasonable, and yet I had entered into a three-year contract to which was appended a code of practice in which it said it would be fair and reasonable. Esso wanted the rest of the chain to achieve what the top quartile of the chain achieved. It cherry-picked costs from various sites and got all the lowest costs together and told retailers what they should achieve without taking into consideration other higher costs that those sites might actually have. So the whole thing was a farce.“In most cases the rent was increased by almost as much as the retailers were earning. Where did it say in my contract that Esso could increase my rent by a perceived increase in business and that it could increase the rent by the sum of money I would have saved by cutting costs? When Esso recruited me it didn’t give me a warning that ‘you enter this petrol station at your own risk. Your rent today is £5,000 and tomorrow it might be £500,000 and you may have to sell your house to perform this contract’.”In terms of the Tiger Token promotion Shailesh says the problem from the outset was that Esso didn’t clearly state what the costs would be.“Esso wrote everyone a letter to say that it would maintain the costs on average at 0.6ppg, but it is the use of the word ‘average’ that is the crucial word here. This made people feel that it wouldn’t cost them anything more than 0.6ppg.“When I had run the Texaco site the set-up had been very clear. Texaco retained a specified amount of my margin to cover the cost of the promotion. It was not an ‘average’ or a vague sum of money. Esso’s promotion was prolonged from a temporary one of six months to 10 years, and it was quite clear that Esso didn’t take any steps to curtail the costs of the promotion to its licensees.“Morally we don’t owe this money to Esso because it just wants more than the business is worth out of us. We have done nothing wrong. That is why we have no choice but to appeal and we will appeal because justice has not been served.”So disillusioned is Shailesh with the fuel industry that he is planning other ventures outside it – including a role as MP: “If I ever become an MP I should thank Louise Nemanich, because if I hadn’t had this Esso experience I wouldn’t have found my MP – Caroline Spellman, who has sponsored me to become an MP!”



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Weekly retail fuel prices: 15 January 2018
RegionDieselLPGSuper ULUL
East124.9460.90131.85122.27
East Midlands124.34132.31121.54
London125.0662.90132.42122.10
North East123.94133.63121.07
North West124.1658.50132.51121.18
Northern Ireland123.4169.90128.40120.85
Scotland124.5774.90130.88121.33
South East125.1561.40132.52122.48
South West124.73130.24121.91
Wales124.44128.57121.19
West Midlands123.7465.23132.27121.20
Yorkshire & Humber123.9161.90132.74121.12

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