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

Level pegging

As Forecourt Trader went to press the nationwide polls showed the two sides were neck and neck and it was too close for either side to be confident of winning the referendum on June 23. As the pressure has mounted supporters of each camp have become increasingly desperate to land a decisive punch, ramping up the rhetoric and stoking up the heat, but the blizzard of contradictory claims has shed comparatively little light.

And just as in the wider community, in the forecourt sector the balance appears to be on a knife edge. In a poll on the Forecourt Trader website last month, asking readers to consider the business case, the Remain camp just shaded it. They polled 46% of the votes versus 44% in favour of Brexit, and while there was a winning margin of just 2%, there were 10% who were still undecided and could have a decisive influence either way.

Results have been similarly close in polls reported by two other titles owned by Forecourt Trader's publisher William Reed. The Grocer reported that a narrow majority of food and drink professionals plan to vote 'out' in the Brexit referendum, despite fearing their businesses will suffer if the UK leaves the EU.

The poll, conducted by William Reed and its market research consultancy HIM, revealed 39% would vote for a Brexit, even though 37% believed leaving the EU could have disastrous consequences for their businesses. The remain camp was just behind with 37% of the vote, but 21% were still undecided.

The survey showed attitudes towards Brexit varied between different sectors. While 52% of suppliers were supportive of the UK staying in the EU, with 52% convinced leaving would be bad for UK food and drink, foodservice operators particularly small traders in the pub sector leaned towards a Brexit, with 46% planning to vote out. Among retailers and wholesalers, the split was even, with 33% for a Brexit and 33% against from a professional point of view, though 43% planned to vote 'leave' in a personal capacity.

"Security comes above commercial interests, and closing our borders will go a long way to achieving this," said one professional when asked as to why they were backing Brexit despite business concerns. "We need to make our own rules and trade deals," added another pro-Brexit respondent.

However, an advocate for staying in said: "If the vote is out, the changeover uncertainty will hamper investment and growth, potentially leading to stagnation for a period until new terms are established."

Brexit was also ahead of Remain in a poll of 100 symbol and unaffiliated retailers conducted by Convenience Store magazine, but here the undecided camp was even larger. It found 37% were in favour of leaving the EU, with 25% intending to vote to remain, but 36% said they were still undecided with 2% saying they would not vote. However, when asked whether their businesses would be better off in the EU, the split was more even with 27% saying they would be, 28% disagreeing, and nearly half (45%) believing it would not make a difference.

When Forecourt Trader asked members of the Top 50 Indies for their views on whether the EU affected their business, most agreed that it had little direct impact, but there were differing views on whether a Brexit would be a good idea.

Paul Kershaw, managing director of MPK Garages, said: "As we do not trade outside of the country, the business does not in itself have a clear driver to remain in or out from a trade point of view, as it would not affect our supply or customer base. On that basis also we do not see a direct benefit from being a member. However, indirectly there is a threat to business generally, including us, if an exit creates economic difficulties and/or makes this country less attractive from a financial investment point of view. These are 'unknowns' at present but not knowing how the finance and economic markets will be affected would beg the question why take the risk is that risk bigger than the potential benefits of an exit?

Mark Carsley, managing director of Carsley Group, who is in favour of a Brexit, commented: "I don't think that our membership of the EU has any significant effect on our business, therefore I don't think anything will change if we should leave the EU."

Andrew MacDonald, who also favours a Brexit, said EU membership made staff recruitment easier, but tongue firmly in cheek added: "Foreign lorries attacking my canopies is a constant problem." In the event of a vote to leave, he said: "The general stability of the markets is a worry but that will ease."

However, Ian Pogue, a director of Rontec, who was not in favour of an exit, warned that if the UK were to leave the EU then Sterling would weaken and this would mean that fuel became more expensive. Clive Sheppard, a director of Chartman Retail and supporter of remaining, added: "Increased uncertainty would threaten business confidence."

John Lynn, the out-going managing director of MRH, declined to express a preference for remaining or leaving. However his views about the prospects for MRH echoed those of many directors of other companies about their prospects, when he said: "Our company stance is that MRH will respect the voting decision of the British public whether they choose to leave or remain within the EU. We believe Britain will continue to be a very successful country within or without the EU, and likewise MRH will be successful under either outcome."

Fuel trader's view

Portland Analytics, an expert on fuel trading, has warned the biggest impact of a Brexit may be on fuel prices. With most commentators expecting sterling to lose value against the dollar it says this could push prices up in the UK. However, it also points out that upstream companies, who pay local costs in sterling but sell oil in dollars, will benefit from any devaluation. Another issue it highlights for upstream businesses, which is shared by many forecourt operators, is possible restrictions in the free movement of labour and the potential future inability to easily recruit EU nationals.
If the UK votes to leave the EU it is also likely to trigger another vote on Scottish Independence, says Portland Analytics, but it says this would not be a major concern for upstream companies, explaining: "For the major investors in the North Sea, it is the price of oil and not the political environment that drives investment."
One of the arguments put forward by the Brexit camp is that EU red tape could be removed, but Portland's report says: "The levels of Health & Safety legislation for an industry as hazardous as oil, gas and petro-chemicals will be the same, irrespective of who administers them."

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

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