Pat Roxborough, Staff Reporter
WESTERN BUREAU:
THE JAMAICA LPG Distributors Association is canvassing support from local cooking gas dealers to strengthen its market position against Shell W.I. Limited, the multinational marketing company which controls more than half of the liquid petroleum gas market.
The course of action against Shell will be decided by the distributors and other members of the petroleum industry who are scheduled to attend the association's annual general meeting next Sunday, according to executive member Patrick Smith.
"The dealers are angry," Mr. Smith told The Sunday Gleaner last week.
Shell has, over the years, been embroiled in several disputes with the local dealers in the petroleum industry as a result of measures taken in what Shell says is an attempt to ensure that the company's international safety standards are not compromised. One of the worst disputes was in 1996 when Shell terminated the contracts of six service station dealers. This triggered strikes across the island by fellow franchise operators who thought Shell was being unfair.
Although Shell has back-tracked on its latest measure, an order that its cooking gas dealers sell only gas bought from the company, there is still dissatisfaction among dealers.
"What we are saying is that if they sell other brands we cannot guarantee them sole geographic rights," said Aston Cooke, Shell's brand communication and public affairs manager.
Mr. Cooke said that his company has been meeting with the association to clarify its position.
"Shell Gas has the most comprehensive and more accessible dealer network across the island and continues to improve this coverage in Jamaica in the interest of its customers," he added. "To this end, Shell Gas strives for the principle of dedicated dealership on this basis. Multi-brand dealers cannot provide this dedicated service."
This stand has been badly received by the local dealers, who claim that Shell is trying to muscle them out of the market by setting up solo dealers at strategic positions beside them and giving these dealers preferential rates which allow them to undersell the dealers.
"Shell wants dealers like myself to sell Shell alone or leave Shell alone," said Mr. Smith who sells all three brands of cooking gas.
But Mr. Cooke told The Sunday Gleaner that Shell is simply exercising its contractual rights. The contract that Mr. Cooke referred to states that the dealers in question shall not acquire from sources other than Shell, LPG or other equipment which doesn't meet Shell's safety specifications unless they have Shell's written permission.
There are several burning issues on the agenda of the association's planned meeting, which will be held at the Jamaica Grande hotel in Ocho Rios, St. Ann under the theme "One Voice, One Vision One Future". These include the contracts between dealers and the multinational marketing companies; the fate of dealers who distribute more than one brand of cooking gas; faulty cylinders; the illicit filling of cylinders; and the Fair Trading Commis-sion's (FTC) position on the matters affecting the dealers.
FTC's Senior Economist David Betty told The Sunday Gleaner that Shell and the dealers are aware of his position on the issue.
"We are supposed to be having dialogue with them next week," he said. "However, the situation raises the question of whether Shell can ask a dealer who is not its franchisee to sell solely its product under circumstances where that individual's clientele depends on other products as in the case of a supermarket.
"Then again, if Shell refuses to sign a contract with a dealer because he refuses to stick the rules, then I would say Shell has that right," he added.
While not ruling out a boycott of Shell by the dealers, Mr. Smith refused to comment on such possible action, claiming several issues had to be resolved first.
"It's just not prudent to comment on a boycott at this time," said Mr. Smith.
Shell supplies 55 per cent of the island's cooking gas needs, with a total of 800,000 gas cylinders of various sizes across the island. Industrial Gases Limited and PETCOM, the marketing arm of the national refinery Petroleum Corporation of Jamaica (PETROJAM), are the island's two other suppliers.
