Monopoly control of oil industry cracked

Press, 17 June 1988, Page 38

Monopoly control of oil industry cracked

Monopoly control of the New Zealand oil industry by the four established oil companies has been cracked by the introduction of Arizona oil. Since the new, independent brand was launched at the beginning of this year, prices at retail outlets have dropped as much as $3.60 for a fourlitre take-home pack. Arizona Gold has already made an impact, according to the company’s managing director, Don Stewart, a former executive of AHI Industries. “Since the introduction of Arizona Gold, service station oil prices have come down,” he said. “Before our company introduced its alternative, virgin engine oil was selling for between $lO and $ll for a fourlitre take-home pack. Now that there is an alternative, prices have dropped to between $7.40 and $lO for the same product “Oil was not covered by the regulations and could have been imported at any time. Our experience shows what could have happened and should have happened years ago.” Arizona Gold is a subsidiary of Top Group, which has established an independent network of 24 North Island service stations.

lup uruup, me uiujumy shareholders of which are Fay Richwhite, the Auckland-based merchant banker, and Brierley, the investment company, has just sponsored the formation of Independent Petroleum, a petrol-buy-ing co-operative that should enable independent service stations to buy competitively priced motor I ,spirit Oil industry deregulation sparked off Top Group. Arizona Gold, originally introduced through its service station network, is now available through other outlets. It is retailed in the South Island. In the meantime, Top Group is limiting its service station activities to the North Island because, according to Mr Stewart, it does not want to overextend itsfelf. However, it is probable that it won’t be long before its influence is'felt in the South Island. Mr Stewart said that franchising agreements, the nature of which he was not at present prepared to disclose, were already the subject of negotiations between the company and various South Island interests. On the face of it, the likelihood of supermarket and chain store Outlets for the Australian-sourced and packaged Arizona Gold products cannot be dismissed *■-