December 27, 2019
Volume 7 Issue 8
Chevron Ending License with Caltex Australia
Caltex Australia will rebrand its operations after Chevron notified the company that it cannot use the Caltex brand on its lubricants and grease products once an existing licensing agreement between the two companies ends.
Caltex Australia said it will change its company name to Ampol, subject to a shareholder vote in May 2020. It will also rebrand its 2,000-plus service station chain and oil products to Ampol, a brand it has owned since the two companies merged in 1995.
“Caltex’s license agreement provides a three-year transition period consisting of a six-month notice period and 30-month work-out period,” Caltex Australia said in a statement released last week. “Caltex has continued exclusive use of the Caltex brand for the notice period and first 18 months of the work-out period. Caltex will begin transition to Ampol on expiry of the six-month termination notice period and will complete the transition across the full retail network within the next three years.”
The company said the decision will save it A$18 million to $20 million (U.S. $12.5 million to $13.9 million) per year in license fees to Chevron. Caltex Australia is one of the top five suppliers in the A$1.7 billion Australian lubricants and grease marketplace, according to business research group IBISWorld.
It is unknown if the Caltex brand will persist in the Australian marketplace. Chevron owns the Caltex brand name and uses it for lubes and grease products in some 60 countries, including China, India and the Philippines.
Meanwhile, San Ramon, California-based Chevron announced Dec. 18 that it had signed an agreement to pay A$425 million for Puma, a fuel and lubricants distributor and service station chain. Puma Australia’s website says it has more than 270 service stations.
A spokesperson for Chevron Australia told Lube Report the company will evaluate all options on what brand it will sell lubricants under in the country after the current license agreement with Caltex Australia ends.
The name change could herald a big shakeup in the Australian market.
“For everyone in the industry it’s going to be important,” said Grieg Herden, technical manager at Hi-Tec Oils, one of Australia’s largest independent-owned lube manufacturers. “As soon as you change your name it’s an opportunity for everyone who is selling. It’s a chance for someone else to come in and say, ‘Hello what happened here? You’re being disadvantaged, stuffed around, delayed. Why don’t you try our product?’”
Elsewhere, a A$8.6 billion takeover bid for Caltex Australia by Canadian group Alimentation Couche-Tard was rejected earlier this month, with the Caltex Australia board inviting Couche-Tard to come back to it with a higher offer. Couche-Tard holds a number of global service station brands but does not own any lubricant assets.