The move has put Esso into conflict with its agents. It is understood that 19 operators are now seeking millions in goodwill compensation for their roles in building Esso’s retail revenues over the past decade. They are unhappy with the “standard” compensation payments they say are being offered by the company.
“The payments just don’t reflect the fact that in many cases turnover has doubled or trebled under our management,” said one agent. “We want our compensation to reflect this and we think we’ve a strong case. We just want our contribution to be recognised.”
The agents had “evergreen” or open-ended contracts with termination clauses built in. Ireland ROC, Esso’s retail arm, gave notice to exercise those clauses earlier this year.
Three former agents have already served the company with summonses and others are set to follow suit in the coming weeks as their notice periods run out.
The company offered agents the opportunity to apply to run the stores as company managers but said there was no guarantee that their applications would be successful.
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Esso declined to comment on the action being taken by agents. It said: “All matters between the company and our retailers are confidential and we would never comment on them. Esso is currently investing millions of euros in upgrading its service stations in Ireland and our aim is to provide consumers with quality products in excellent locations.”
While there are close to
270 Esso-branded stations in the republic, the oil company directly owns just 75 of the forecourts. About 50 of these were operated by agents. Under this arrangement, the operators of the forecourts were self- employed and bore the staffing and other costs of running the stations.
Esso, a subsidiary of New Jersey-based Exxon Mobil, is now planning to put its own management teams into these forecourts and to employ staff directly.
Statoil, the country’s biggest forecourt retailer, operates a similar model at all of its filling stations.
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Esso is currently selling 14 company-owned service stations in Sligo, Galway, Limerick and Cork. Some will be sold to the existing operator. The oil company, which has operated here for over 100 years, plans to concentrate its activities in the Leinster region.
Latest accounts for Esso Ireland show it had turnover of €447.4m in 2002 and retained profit for the year of €19.8m. The company has invested between €15m and €20m in the past couple of years refurbishing a number of its Dublin-based filling stations under the “On the Run” brand, which incorporates convenience stores. It plans to spend €70m overhauling its forecourts.