LAST MONTH’S JUDGEMENT in the Esso case arrived too late for my column, which, while unfortunate, does mean I’ve had a little longer to consider the outcome. Obviously the overall result was very disappointing – Esso won on two out of three of the issues and is already three goals up on the unresolved matter of whether its margin cuts etc were reasonable. The result was especially disappointing because during the case Justice Moore-Bick had given every indication that he was not going to fall for the ‘we’re a well respected multi-national company and they are unimportant individuals so who are you going to believe?’ routine.
ON THE MATTER OF whether licensees were liable to pay for the Esso Collection I don’t think he had much option. Anyone who’d been in the trade for a while must have known that, in the normal course of things, they would be expected to pay their contribution. The only real hope was if Esso had slipped up with its paperwork or if a licensee had anything in writing that absolved them for payment. I can only assume this wasn’t so in either case. You know, promotions can prove very dangerous exercises. Remember the Hoover ‘free flights’ fiasco? Looked good on paper except the expected redemption ratios were critically underestimated. More recently, there was Texaco’s Lilo & Stitch newspaper offer of a free box of Quality Street – although to give credit where it’s due (God, has all this sun baked my brain?) at least Texaco paid for most of the redemptions itself.
THE ONE COMMON THEME that seems to run throughout all petrol promotions is the disparity between the perceived issue rate of vouchers and the actual rate of redemptions. This is part of the whole dishonesty of promotions – for the incentive to be worthwhile, it can only be afforded if 50 per cent of the customers never actually receive anything, but for the promotion to be effective you want 100 per cent of your customers to participate. How many meetings have you been to where operators have been harangued about the results of mystery motorist visits where the promotion wasn’t offered? You’re letting the side down, we’re told, you’re just not pushing hard enough. Yet when the promotion ends we discover that redemption rates have exceeded the anticipated rate.
IN HIS JUDGEMENT, Justice Moore-Bick went out of his way to comment: “I think it is important to emphasise that the licensees have not contended that as a matter of construction the obligation to join in promotions at their own expense is subject to any particular limitation, either in terms of the amount of costs that they can be required to bear, or in terms of the duration of the promotion.” Perhaps he was trying to suggest that there would have been a better case in arguing about the size of the liability as well as whether any liability existed.
ON THE HOT FUEL ISSUE I believe the judge took a very narrow view. On the one hand he said that, as product is measured at standard temperature at the gantry but sold at ambient temperature at the pump, there had to be a changeover between the two methods of measurement somewhere so it might just as well be us who cop for the loss. On the other hand he pointed out that a term of the contract was that ‘the seller’s measurements of quantity will be accepted by the buyer’ – so the licensees couldn’t argue about quantities now. I’d like to think that if the late Lord Denning had been hearing the case he might have suggested this term was so unfair as to be unenforcable. This would be especially so if a case was brought now. Firstly we have no way whatsoever of checking what is actually onboard a tanker. Secondly, every oil company includes the ‘seller’s measurements’ term – if you want to sell petrol you have no choice than to agree to this blatantly unfair restriction. It hurts a Euro sceptic like me to say it, but perhaps the only people who would come to our rescue would be the European Courts. How sad – and what an indictment of our own system.