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Coles and Viva Energy renew fuel partnership

Shell3Viva Energy will pay A$137 million to extend its partnership with Coles until 2029 in which it will set the retail price of fuel.

The supermarket giant will receive a commission per litre from Viva Energy based on fuel volumes achieved. Viva will set the retail price of fuel and receive the retail fuel margin. As a result, Coles will no longer have direct exposure to retail fuel price movements.

“We believe the benefits of the new agreement are compelling for all customers, team members and shareholders. We look forward to jointly working with Viva Energy to re-establishing the Alliance as Australia’s leading petrol and convenience retailer,” Coles CEO Steven Cain said.

Coles convenience business will continue to operate at Viva Energy’s Shell petrol stations so customers and suppliers will not see any change to the merchandising and services at Coles Express store.

“Today’s announcement signals a significant step forward in our long-standing Alliance with Coles Express. Together, we represent Australia’s leading fuel and convenience offer and we look forward to growing the Alliance with Coles Express in the years to come. I am excited by the benefits these
new arrangements will enable us to deliver for both our customers and our shareholders,” Scott Wyatt, Viva Energy CEO, said.

Coles said the fuel deal will open a potential wholesaling opportunities for Coles Convenience outside the Alliance to supply Viva Energy’s independent retailers. Existing loyalty benefits will continue to be available to Coles Convenience customers including Coles’ four cent per litre fuel docket discount and earning flybuys points on fuel and merchandise at Shell petrol stations.

The 10-year agreement will come into effect from March 2019.

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