News

Total Butler acquisition under scrutiny

Concerned that the merger of Total Butler and GB Oils would remove a key competitor to GB Oils; the Office of Fair Trading (OFT) referred the acquisition to the Competition Commission just before Easter.
 
In England and Wales, GB Oils has 100 depots whilst Total Butler has 40. Both supply a similar range of oil products to domestic, commercial and agricultural customers.
 
Of particular concern to the OFT is the supply to customers who require deliveries across multiple sites, but whose volumes are too small for them to be viably served by the major oil companies or by oil traders.
 
“Although there are a large number of oil distributors operating in theUK, three of them stand out in terms of the scale of their networks: the two merging parties and Watson Fuels,” said Amelia Fletcher, OFT chief economist and decision maker in this case.
 
“A significant number of multiple site, non-bulk customers, who need suppliers with access to such infrastructure, were concerned at the prospect of a merger of GB Oils and Total Butler. We consider that the Competition Commission should look in detail at the impact of the merger on these customers, as well as whether the merger may result in higher prices for customers buying oil products in specific local areas where the parties overlap.”
 
The Competition Commission is expected to report on the case by 18th September 2012.