Retailers challenge Caltex over 'deceptive' conduct

The memo says that by doing so the company is depriving them of the chance to recover goodwill, that it is misrepresenting financial aspects of the business to retailers before they sign their contracts, and that it is breaching the Fair Trading Act by engaging in "deceptive and misleading conduct". It also says Caltex is using a dominant position to pressure retailers to accept rental agreements.

The New Zealand Herald
December 8, 2003

Retailers challenge Caltex over 'deceptive' conduct
Ellen Read

Caltex retailers are taking legal action against the oil company, accusing it of breaching good faith.

Over 100 have formed a Caltex Retailers Association and legal papers will be filed before Christmas, says consultant Tony Teesdale, who is acting for the group.

A confidential memo obtained by the Business Herald shows Caltex is being accused of refusing to allow some retailers to sell their businesses.

The memo says that by doing so the company is depriving them of the chance to recover goodwill, that it is misrepresenting financial aspects of the business to retailers before they sign their contracts, and that it is breaching the Fair Trading Act by engaging in "deceptive and misleading conduct".

It also says Caltex is using a dominant position to pressure retailers to accept rental agreements.

Teesdale said the contracts between Caltex and the retailers allowed the company to make some changes to terms and conditions - to margins or rents, for example.

Because the contracts were in the company's favour, the onus was on it to act in good faith to ensure the retailers were not constantly disadvantaged, Teesdale said.

The retailers did not believe this was happening and were taking legal action to force changes.

"It's unreasonable for Caltex to continually keep making changes which advantage itself to the clear disadvantage of retailers," Teesdale said.

He said there was a lot of protection for employees but not much for small employers, who made up most of the employers in New Zealand.

The retailers had been working together for almost a year asking for talks with Caltex.

"It's fair to say that they're not keen on talking about it," Teesdale said.

"This is an expensive exercise. We've tried the request for a meeting approach and that's been refused."

He was reluctant to specify what the retailers were seeking from a legal outcome, saying only that the fundamental issue was the one-sided nature of the contracts, so change to that was wanted.

Caltex spokesman Niall Kramer said the company aimed for a viable and sustainable business partnership with retailers where both parties understood their obligations and were successful in the "extremely competitive and margin-squeezed environment".

"We recognise this will not be true in 100 per cent of cases, but to date our progress in renegotiating terms has resulted in a significant majority now being in the new programme [of contracts]," he said.

Some contract changes had been discussed and agreed to this year.

"We recognise there will be a minority group who want another arrangement and we will discuss directly with these few retailers any issues of substance," Kramer said.

  • In Australia, franchise operators are considering legal action against Caltex over its co-branded alliance with retailer Woolworths.

The Australian Financial Review reported last week that franchise operators were angered over alleged damage to their businesses as the Caltex-Woolworths outlets competed against them by offering discounts to the retailer's shoppers.


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