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Woolworths Caltex Agreement

10.16.21 Posted in Uncategorized by

Woolworths Group has also signed a new 15-year wholesale fuel supply agreement with Caltex Australia, which ensures competitive fuel costs in the market that are expected to bring significant and sustainable benefits to Woolworths` oil business. The pre-tax benefit is expected to exceed C$80 million ($59.4 million) per year and will be paid to the Woolworths Petrol business, which will continue to be treated as an discontinued business for accounting purposes. In addition, Caltex Australia will make a one-time payment of approximately A$50 million ($37.1 million) to woolworths Group. The new fuel supply agreement is concluded on terms that represent a reduction in Caltex Australia`s annual EBIT of A$80 million ($59.4 million) compared to the current contract. The wholesale contract for the supply of fuel also means that Woolworths can offer up to 250 mini-supermarkets under the “Metro” banner at Caltex petrol stations. Under the ec-Woolworths agreement, EG Australia and Caltex Woolworths petrol stations will continue to offer a 4¢ per litre discount on the pump price to customers who present a fuel voucher in the form of a folder or in their Woolworths Rewards loyalty card received after an eligible amount of 30¢ or more at Woolworths supermarkets and Big W department stores in Tasmania. Prior to September 2010, fuel records could also be purchased nationally after spending at Big W. [Citation needed] The 4¢ per litre discount can be doubled to 8¢ if the fuel customer also spends at least 5¢ on goods at the gas station store and pays for both fuel and goods in the same transaction. Before taxes, it is estimated that the new deal will bring in $80 million a year for Woolworths Group, or $1.2 billion over the course of the year. Under the 15-year supply agreement, Caltex will make a one-time payment to Wooolworths in the amount of $50 million. The new fuel supply agreement is on terms that represent an $80 million reduction in Caltex`s annual profit compared to the previous contract. On November 7, 2018, it was announced that 125 Caltex sites had begun accepting the Woolworths fuel discount exchange, and that 680 Caltex sites had also begun allowing Woolworths Rewards members to earn points and join the existing network of 538 Caltex Woolworths locations and 104 Caltex-operated locations.

[9] Two days later, on the 9th. In November 2018, Woolworths announced that it would sell its 540 stores to British company EG Group for $1.72 billion. [10] Woolworths stated that it would enter into a 15-year agreement with EC that would maintain the exchange of fuel discounts through the network and earn Woolworths Rewards points for fuel transactions on its network. .

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