UPDATE: The Pantry, BP Extend & Amend Supply Deal
New agreement expires in 2019
CARY, N.C. -- The Pantry Inc. has entered into a new branded jobber contract with BP Products North America Inc., the convenience retailer said in a filing with the U.S. Securities & Exchange Commission (SEC).
"We have developed a strong relationship with BP Products North America Inc. over the last several years, and are pleased that we will be continuing that relationship. Our new contract will allow us to continue to provide Kangaroo Express customers with the high quality products that they need and expect," said Dennis Hatchell, president and CEO of The Pantry.
"We continue to strengthen the BP brand in the Southeast through strategic relationships with customers like the Pantry," said Corey Correnti, BP vice president of sales, marketing and supply. "These sites offer competitive formats and represent the BP fuel brand well."
The agreement supersedes and replaces the original branded jobber contract dated Feb. 1, 2003, as amended, between the company and BP. Although the recent extension of the original agreement went to Jan. 31, 2013, the effective date of the agreement is Jan. 1. On Dec. 26, 2012, the original agreement was extended by the parties to Jan. 31, 2013, to allow the company and BP sufficient time to finalize the terms of the agreement, which supersedes and replaces the original agreement effective as of Jan. 1, 2013.
The agreement provides for BP to supply, and The Pantry to purchase, certain minimum amounts of motor fuel for the company's specified convenience store locations. The agreement initially relates to 394 BP-branded outlets with provisions allowing for locations to be added to or removed from the agreement during the term of the agreement for specified reasons.
The prices provided for in the agreement are based upon industry indexes, said the filing.
If the company fails to purchase its annual minimum contract volume, BP may charge the company a shortfall penalty of two cents per gallon times the difference between the number of gallons purchased and the minimum volume requirement.
The term of the agreement expires on Dec. 31, 2019.
In other company news, The Pantry has appointed B. Clyde Preslar as its new chief financial officer.
Based in Cary, N.C., The Pantry is a leading independently operated convenience store chain in the southeastern United States and one of the largest independently operated c-store chains in the country. As of Jan. 3, the company operated 1,572 stores in 13 states under select banners, including Kangaroo Express, its primary operating banner.