Fuel tie-up drives down sales for Coles

COLES has lost upwards of 1.3 billion litres in annual fuel sales – enough to fill-up more than 400,000 cars a week – since it formed a supplier partnership with Viva Energy.

Petrol sales at Coles Express service stations have dropped by one-third since 2014 as the supermarket heavyweight consistently charges more than rivals.

The lack of a competitive fuel offer from Coles, which operates a network of more than 700 petrol stations, is troubling analysts as the nation’s second biggest supermarket chain prepares to begin life as a company listed independently on the stock exchange.

“It’s certainly one of my key priorities to work with Viva and look for some win-wins,” new Coles chief Steven Cain told analysts this week.

Swiss-based commodities trading titan Vitol bought Shell’s network of service stations and the Geelong refinery at the start of 2014.

The transaction meant Vitol, which branded its Australian operations Viva Energy, became the Coles.

Under the arrangement, Coles, owned by Perth-based conglomerate Wesfarmers, retains control over pump prices.

But Viva is charging Coles more for fuel than Shell did, particularly since 2017.

Coles has passed the price hike on to motorists rather than take the hit itself. fuel supplier to