Couche-Tard May Bring 'Euro Gas' to New World

Mulling introduction of Statoil's 'Miles' fuel in North America; talks unions, liquor sales, more

Statoil Miles Couche Tard

LAVAL, Quebec -- Alimentation Couche-Tard Inc. CEO Alain Bouchard said that the company may introduce to North America a fuel-saving gasoline developed in Europe after it completes a planned rollout to its 2,300 retail locations in Scandinavia and Eastern Europe, reported the Canadian Press.

He said after the convenience retailer's annual meeting Wednesday that additives included in its Miles-branded fuel sold in Europe reduce fuel consumption by 2% to 3% and cut auto maintenance costs.

Couche-Tard obtained the fuel's European patents after buying Statoil Fuel & Retail, said the report.

Bouchard said he was "blown away" when a research team in Norway shared details of the fuel with company executives.

He said the priority is to extend where the fuel can be purchased in Europe next year before deciding on the potential timing of a North American launch. Currently, the company has no patent on the product in North America.

"We will start by covering Europe. We will introduce in countries that aren't covered now starting in 2014," he told reporters, according to the news agency.

The fuel price is the same as product not containing additives. The Miles fuel is available in different grades and in diesel.

"Margins are a little less because of the additives, but the goal is to grow the market share," Bouchard said.

He declined to say where the fuel is made or what form of additives create the operating savings.

Meanwhile, Bouchard said Couche-Tard will focus in the coming year on further integrating its operations with Statoil Fuel

"Large acquisitions are always long-term negotiations" and nothing is foreseen at the moment, he said, pointing to strong competition in North America.

The company has also been working to expand its fresh food offering, especially in Quebec, where progress has lagged its other operations, said the report. It will introduce several new products in the coming months.

Bouchard described last year's fifth consecutive year of record earnings as the biggest in the company's history. But he said the expansion to Europe, which now accounts for about 36% of its operations, was emotionally challenging.

"It prevented me from sleeping some nights," he said. "It was a lot, the biggest acquisition we have ever done, with the management and culture that was very different."

During the meeting, shareholders rejected a proposal requesting that the company prepare a report on the costs and benefits of unionization at its stores, reported CP. Couche-Tard has repeatedly blocked unionization efforts at locations in Quebec and faces several proceedings before Quebec's labor relations board.

Several union representatives denounced the company's approach while members protested outside the hotel where the meeting was being held, said the report.

And Bouchard criticized the Ontario government's unwillingness to allow beer to be sold in convenience stores, thereby favoring brewers that own the Beer Store network, CP said. The company had promised a major investment in new stores in the province if it were allowed to do so.

"I am so surprised that they are allowing a duopoly or triopoly to sell beer in Ontario exclusively," he said. "It doesn't make sense."

He also said he's not concerned that Loblaw's acquisition of Shopper's Drug Mart, which has enlarged its grocery offering, will further pressure convenience store sales in Ontario, reported the news agency.

"What we have proven over the years is that we can compete and gain market share. ... It's the weaker players that suffer and eventually disappear, so when this happens, we win," he said.

Laval, Quebec-based Couche-Tard's network currently includes approximately 6,200 c-stores throughout North America, including approximately 4,500 stores with fuel. Its North American network consists of 13 business units, including nine in the United States covering 40 states and the District of Columbia (under the Circle K banner) and four in Canada covering all 10 provinces (under the Couche-Tard and Mac's banners). Through its acquisition of Statoil, Couche-Tard also operates a retail network across Scandinavia (Norway, Sweden, Denmark), Poland, the Baltics (Estonia, Latvia, Lithuania) and Russia.