BWG signs forecourt supply deal with Maxol

BWG, the grocery wholesaler that operates the Spar and Mace brands in Ireland, has signed a new five-year deal with Maxol to supply goods to about 80 filling stations in the State.

These forecourt stores will operate under both the Mace and Spar symbols and are projected to achieve combined sales of €400 million during the contract period.

This is BWG's first major deal since the company was acquired last October for €390 million by three of its directors, Leo Crawford, finance head John O'Donnell and property director John Clohisey. The trio each own one-third of the equity in the business.

"We're very happy to have tied down this deal for another five years," Mr Crawford said. "This is a very good start for us and we're anticipating significant growth in the business."

This extends a 10-year partnership between BWG and Maxol that previously covered more than 50 forecourt shops.

Under the new deal, 25 new stores will be added to the network. Maxol is also planning to spend €6 million upgrading about 30 existing Mace shops supplied by BWG.

The stores will operate as Mace outlets in Leinster and Munster with the Spar brand being used in the west. BWG does not hold the licence to use the Mace brand in the west.

BWG, which has 25 cash and carry outlets, will supply more than 80 per cent of all goods sold in the Maxol forecourt shops.

The wholesaler operates 128 Mace stores here, which have combined retail sales of about €220 million.

Mangan Wholesale, meanwhile, operates the Mace franchise in Connacht and some counties in Ulster. Mangan has operated five Mace forecourt shops for Maxol but this arrangement is now set to end.

Tom Noonan, Maxol's chief executive, said there was significant potential for growth in its forecourt operations. "A number of petrol stations are closing around the country for development purposes so we see huge potential for growth in our retail operation," he said. "We're also planning a number of retail innovations that we believe will prove popular with consumers and will enhance our offering."

Maxol is wholly owned by the McMullan family. The company reported pretax profits of €5.8 million on turnover of €816.6 million in the year to the end of December 2005.

The oil group has 120 filling stations on the island, with about 40 of these in Northern Ireland. Its stations are operated by licencees.

BWG has annual sales of some €1.2 billion. It supplies 439 Spar, Eurospar and Spar Express outlets and the Mace stores in Ireland. It also operates 327 Spar stores in south-west England. About 140 of the Irish stores are company-owned and operated by franchisees.

The wholesale group recently appointed Stewart Kenny, a founder and director of Paddy Power bookmakers, and John Mahony, a founder of communications group Reputation Inc, as non-executive directors of the company.