Latest / The SME Stream / Terry Collins: AA Fuel spokesperson says long awaited fuel price drop could be coming with major merger

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Terry Collins: AA Fuel spokesperson says long awaited fuel price drop could be coming with major merger · The SME Stream

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  Speaker 1: You're listening to a podcast from News Talks be follow
• 0:12
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  Speaker 2: It was announced that the petrol companies MPD and GULL
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  Speaker 2: would like to merge and there is hopes obviously that
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  Speaker 2: this could lead to cheaper fuel. The decision now less
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  Speaker 2: rests with the Commerce Commission, who must decide whether the
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  Speaker 2: merger would boost competition or reduce it. They will be
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  Speaker 2: doing this in January. So I'm joined now by the
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  Speaker 2: AA's fuel spokesperson Terry Collins. Good onding to you.
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  Speaker 3: Terry here, Good morning.
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  Speaker 2: So we've been complaining about our punk prices because the
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  Speaker 2: price of oil has been going down, but it's not
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  Speaker 2: being seen at the bowser. Do you think we can
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  Speaker 2: be optimistic about lower fuel prices of MPD and GULL
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  Speaker 2: are allowed to merge.
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  Speaker 3: Well, the one thing Gal has been known for us
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  Speaker 3: what was called the Gull effecting my fester in the market,
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  Speaker 3: and this was everywhere that they opened the low cost
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  Speaker 3: operating service station looking all was cheaper and then the
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  Speaker 3: competition had their prizes to match it. So both Goal
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  Speaker 3: and MPD for a very similar model which is a
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  Speaker 3: low cost, no staff, just the pumps, of the bowser
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  Speaker 3: and the ability to pay by their card and therefore
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  Speaker 3: they keep their overheads down very low, and they did
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  Speaker 3: a cheap fuel. So hopefully with the two of them
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  Speaker 3: combining and the synergies around it will continue to see
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  Speaker 3: even lower fuel. That's my wish. Yeah, so that hopefully,
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  Speaker 3: I think they really bring that local thing. Also, the
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  Speaker 3: interesting part around it too has been gold had to
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  Speaker 3: be sold because am Pole, who were now there where
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  Speaker 3: they passed owner brought Z and under their purchase agreement,
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  Speaker 3: am Pole, who was zed had to supply them with
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  Speaker 3: fuel for five years from May of twenty twenty two.
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  Speaker 3: So probably what was mergent is now as it allows
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  Speaker 3: them as a joint entity to secure their fuel supply
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  Speaker 3: long term into the future.
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  Speaker 2: Yes, I understand that they're going to combine the distribution
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  Speaker 2: centers into a center in Mount MONTINUI and the toweling
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  Speaker 2: and district and they're going to be providing a billion
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  Speaker 2: liters of fuel annually. That's a lot of fuel and
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  Speaker 2: with that amount of throughput they could be able to
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  Speaker 2: sort of screw down some pretty good deals.
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  Speaker 3: Yeah, it's let's hope that they can. What we want
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  Speaker 3: to see is the AA is those deals being passed
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  Speaker 3: on to the motorist. Because what we're seeing now we
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  Speaker 3: monitor weekly with all the inputs. It's the landed price,
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  Speaker 3: which affects the price of world refining, shipping taxes, to
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  Speaker 3: est the missions trading scheme, all those cost puts into
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  Speaker 3: a fuel But we're seeing that margin. It's at a
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  Speaker 3: level that we've never seen before since I've worked here.
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  Speaker 3: It's the largest margin I've seen between landed price and
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  Speaker 3: retail price. And these companies what they need to do
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  Speaker 3: is not just off of discounts and specials on particular days,
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  Speaker 3: but we need to see across the board drop them
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  Speaker 3: their fuel prices.
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  Speaker 2: Currently all right now. GULL is primarily in the North Island.
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  Speaker 2: They've been going for twenty five years. MPD is South
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  Speaker 2: Island based, they've been going for fifty five years. The
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  Speaker 2: question here though, will be who's going to eat who.
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  Speaker 3: I don't think it's a case of who eats too who.
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  Speaker 3: I think MPD is Nelson Jorn Distributors. It's a family
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  Speaker 3: based New Zealand owned industry. They know their business goal,
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  Speaker 3: has a management scheme, but it's owned by an investment company.
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  Speaker 3: So to me, how I think about it is this
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  Speaker 3: investment company is giving it to a safe, pure of
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  Speaker 3: hands for a family operated business who know how to run.
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  Speaker 3: They all business, the fuel business, and so they're kind
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  Speaker 3: of I don't know. I think it's just a really smart, strategic,
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  Speaker 3: long term plan for the growth of both of them.
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  Speaker 2: Okay, So of course the ComCom has to decide whether
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  Speaker 2: this is going to reduce competition or not. Will they
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  Speaker 2: look on this favorably or not.
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  Speaker 3: I can't make a decision for the Communist Commission. What
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  Speaker 3: they're going to look into. What I do now is
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  Speaker 3: that they if they can bine together and bring the
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  Speaker 3: synergies of both the companies and the advantages of both
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  Speaker 3: that they bring with distribution and their terminals and other
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  Speaker 3: things to it, and pass those prices on, then it's
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  Speaker 3: going to be good for competition. So that's the kind
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  Speaker 3: of fact of that the competition, sorry, the Commerce Commission,
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  Speaker 3: where we look at will they bring those sharp prices
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  Speaker 3: to us and eat the lunch of the big ones
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  Speaker 3: for one of them bitter un and if they do,
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  Speaker 3: I think that they will get approven.
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  Speaker 2: And on another note, is Mobile still looking for a buyer?
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  Speaker 3: I'm not sure about what Mobile's doing, but I do
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  Speaker 3: know that mobiles supply MPD SO and they supply like
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  Speaker 3: Allied and some other other companies as well. So the
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  Speaker 3: businesses is around not just their own brand, but they
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  Speaker 3: supply fuel for a number of independents.
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  Speaker 2: But they may take a hit with the new organization. Terry,
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  Speaker 2: I thank you so much Terry Collins as the AA
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  Speaker 2: Fuel spokesperson.
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