Saturday 18 November 2017

Bord na Mona to sell oil unit to rival convicted of price-fixing

Donal O'Donovan

Donal O'Donovan

BORD na Mona is close to a deal to sell its oil distribution business to a Galway rival with a conviction for price fixing, the Irish Independent has learnt.

Galway-based Corrib Oil looks set to seal a deal to buy state-owned Suttons Oil from Bord na Mona following a lengthy process to find a buyer for the loss-making business.

A spokesman for Bord na Mona confirmed that a deal to sell Suttons Oil was close to finalisation, but declined to name the potential buyer.

"The company can further confirm it is engaged in confidential negotiations concerning the future of Suttons Oil and is communicating with various stakeholders, including company employees.

"The company will not be commenting further until this process has been completed," the spokesman said.

It followed a strategic review of its Consumer and Professional division, which includes Suttons Oil, he said.

However, the Irish Independent understands that Corrib Oil is in talks to buy the company.

Eugene Dalton, who runs Corrib Oil, could not be reached for comment.

Suttons Oil had a turnover of €32m in the year to the end of March, but suffered a loss for the year of €446,000.

The state-owned company operates mainly in Munster as an Esso dealer supplying home-heating oil and commercial fuel for farms, fisheries and industry.

It currently employs around 30 staff.

Bigger rival Corrib Oil is the largest Irish-owned oil distribution business and forecourt operator in the west of Ireland. The company had a turnover of €243m in 2011.

FEARS

It operates 17 depots and 15 service stations across 12 counties, mainly in Connacht, and employs more than 400 staff.

Staff at Suttons Oil are understood to have been briefed on the potential sale to Corrib at a meeting in Thurles this week.

It is understood that employees at the event raised fears for the future of their jobs following any sale, and questioned the decision to sell the business to Corrib Oil, which was fined in 2007 after a then director admitting its role in a price-fixing cartel.

That was in reference to a 2007 court case, when the Galway company was fined €15,000 and the director was fined a further €10,000 at Dublin Circuit Criminal Court.

Corrib Oil was one of 10 oil distributing companies found to have operated the price-fixing ring.

At the 2007 case, a then director of the company pleaded guilty on his own and the company's behalf to breaches of Section 3 of the Competition Act 1991 on dates in 2001 and 2002.

The court had previously been told that the operation of a cartel had cost the public in excess of €4m, with prices inflated by as much as 10pc.

At the time, Judge Katherine Delahunt said Corrib Oil had not contributed more than the other nine companies involved in the cartel, but as the biggest company participating in the area, the cartel would not have functioned without it.

A spokesman for Communications and Energy Minister Pat Rabitte, who is ultimately responsible for Bord na Mona, did not respond to questions about the sale process.

Irish Independent

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