Turnover was up 4% at Maxol to €486m last year
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What is the main topic discussed in this episode?
Breakfast Business with Enterprise Ireland on Newstalk. The budget three weeks ago increased the cost of fuel up to an average of 172 per litre of petrol and 168 for diesel. We've also learned that EV sales are starting to take off in Ireland. All these reasons mean that petrol forecourts are no longer places just for fuel. Mini supermarkets are often attached to them to boost revenues, and that's one of the reasons why turnover was up 4% at Maxall to €486 million last year. Brian Donaldson is the Group Chief Executive of Maxall. Good morning, Brian. Good morning, Joe.
What recent changes have impacted fuel prices in Ireland?
Remind us why fuel prices in Ireland are among the highest in Europe.
Well, look, it's very simple. It's just down to duty tax and the carbon tax. You know what they said by 2030, it's going to be 100 euros per tonne. And at the moment, it's sitting at 71.50. So it will be two euro a litre pretty soon then? Well, it's moving in that direction.
How are EV sales influencing the fuel market?
And I think the other side of it is you've got to bear in mind our closest neighbour has a different fiscal policy in terms of fuels. And already we can see a migration of southern customers moving into Northern Ireland where fuel prices, and if you're looking at it and cent per litre, Petrol is now nearly 24 cent a litre cheaper, and diesel is about 16.
That's a huge difference.
What strategies are petrol forecourts using to increase revenue?
If you've got a large vehicle and you're in one of the border counties, it makes absolute sense to drive into Northern Ireland. Do you see quite a few white regs up in Northern Ireland?
You're on both sides of the border, obviously. Very much so. So you can definitely see that. And I would say Donegal as a county is certainly being impacted with a lot of people moving over into Derry and into...
And of course, sometimes they're going up for their supermarket shop as well. So it makes it worthwhile. Do the forecourts such as Maxol get mentally blamed by consumers when prices go up? I.e., you've just told us some of the reasons why we pay such high fuel prices here. But does Maxwell get blamed or do people know that a lot of it is government-imposed surcharges?
I think everyone realizes the price of fuel, the basic price of fuel, never really changes that dramatically. Okay, there's volatility in terms of prices at the moment to do with geopolitical events. But the consumer realizes that 60%, 65% of the price goes to the government. Wow. Do they? Absolutely.
I think they do. Over the past three years, you have invested 120 million euros in your business.
Why are fuel prices in Ireland among the highest in Europe?
That's a fair bit of money for one company. What have you invested in?
What we've been investing in, Joe, is growing our network reach. So we've acquired 14 new service stations in the last three years. And those are geographically located in high residential locations. And that's where we're looking at building out our food, our convenience and our car washing business. But also the footprint of those sites is much larger than what we typically have. And also the profitability from those sites, 70% comes from non-fuel sales. It's coming from food. It's coming from convenience. Absolutely, 70%.
So I mentioned mini supermarkets, so that's pretty accurate then.
It is. It is because we are very much a community-driven, local-based business.
A franchise-type business.
Yes, very much so.
Those supermarkets, there is a cap on the size of those mini supermarkets. That's probably restricting your growth to a certain extent.
It is. It is. In the Republic of Ireland, under the retail planning guidelines, we're only allowed to have 100 square metres of retail for traditional convenience top-up shopping. Whereas if you go into Northern Ireland, there's no such restriction. And they're giant supermarkets with a few petrols. Yes, we're building larger sites certainly in the north of Ireland compared to what we'd be doing in the south. And that's quite simply down to the planning requirements. you know, restrictions that we have. But in the Republic, our business is very different, too. We're a very large food service. We're a very large coffee business under Maxwell Rosa Coffee.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:01–0:38
2
What recent changes have impacted fuel prices in Ireland?
0:38–0:58
3
How are EV sales influencing the fuel market?
0:58–1:19
4
What strategies are petrol forecourts using to increase revenue?
1:19–2:27
5
Why are fuel prices in Ireland among the highest in Europe?
2:27–6:53