FTC puts Total gas market share at 30% - Sees no threat to competition from Epping deal
Published:Friday | May 8, 2020 | 12:08 AM
THE ACQUISITION of Epping resulted in Total Jamaica controlling nearly a third of the retail gasolene market, but that’s not enough to lessen competition, the Fair Trading Commission, FTC, has found.
“The acquisition is unlikely to have either the purpose or effect of substantially lessening competition, since the FTC staff determined that Total and Epping were not direct head-to-head competitors in any relevant market,” the agency said in its assessment of the deal.
The acquisition resulted in Total controlling the largest network of gasolene dealer locations at 74, which surpassed Texaco’s 70 locations, according to the report that cited 2018 data.
“Since there are approximately 250 dealer locations in Jamaica, the acquisition would result in Total having a network of approximately 30 per cent of dealer locations,” FTC concluded.
Before the acquisition, Total’s market share stood at 22 per cent.
The French company purchased 100 per cent of Epping from its Jamaican owners in a share deal completed on May 8, 2019. Total’s network then comprised 57 service stations in 13 parishes, while Epping had 17 stations in eight parishes.
The brands did not compete head to head in most of the locations, the FTC found. In three of the locations, the combined marketing companies now hold the largest market share.
In Half-Way Tree, Kingston, Total and Epping control 24 per cent and 17 per cent, respectively; together surpassing Texaco at 26 per cent; in White River, St Ann, they hold 18 per cent and 12 per cent share, surpassing Rubis Energy Jamaica at 23 per cent; and in Port Antonio, Portland, their share is 20 per cent and 30 per cent, respectively, together surpassing Texaco at 30 per cent.
None of the three locations rise above 50 per cent share for Total-Epping, nor are prices likely to be affected as a result of the merger, the competition watchdog said.
“Total was not more likely to be the low-price leader in markets in which Epping was present than it was in markets in which Epping was absent. To this end, [it] suggests that multinational petroleum marketing petroleum companies exerted greater competitive constraint on Total than local marketing companies did,” the report noted.
Epping was formed in 1992 as a family-owned company managed by Neville Marsh. Total entered Jamaica in 2004 after acquiring 22 stations operated by Roy D’Cambre under the National brand. The deal gave Total 10 per cent of the market. The company later acquired the operations of Esso stations, which grew its market share to around 22 per cent.
GB Energy acquired the Texaco operations in Jamaica in 2012. Rubis Energy took control of the local Shell retail assets in 2013.