Fuel giant Caltex Australia has announced its intention to rebrand, which will see the 83-year-old Caltex brand disappear entirely from the local marketplace.
Caltex Australia is an ASX-listed entity but uses the Caltex name and brand on licence from Caltex’s US parent company, Chevron.
According to Chevron’s website, Caltex was formed on 2 July 1936 as a joint venture between two American oil companies, which created the California Texas Oil Company – since abbreviated to Caltex.
“For the past eight decades, the Caltex star has been trusted by consumers from Africa to the Asia-Pacific region. Current surveys confirm that we are a brand to be ‘highly regarded and trusted’,” Chevron’s website said in a profile marking the brand’s 80th anniversary in 2016.
The Australian business as it currently stands was formed in 1995 with the merger of Caltex and Ampol.
It continued to use the Caltex name and brand on licence from Chevron, after its subsequent full listing on the ASX.
However, just two days before Christmas, Caltex Australia announced that talks with Chevron to renew the brand licence had broken down, meaning that it will disappear from use in Australia over the next three years.
The Australian business will instead revive the old Ampol brand across its service stations and other location operations.
“Caltex Australia Limited (ASX:CTX) today announces it has received a termination notice from Chevron Corporation regarding its current licence agreement for use of the Caltex brand in Australia,” the business said in a statement to the ASX on Monday (23 December).
“This follows 18 months of discussions with Chevron regarding the future of the licence agreement. Caltex today also announces it will proceed to implement existing plans to transition to the company-owned Ampol brand following a detailed brand strategy review.”
It noted a “three-year transition period” will be implemented to phase out the Caltex name and brand in Australia.
“Caltex will begin [the] transition to Ampol on expiry of the six-month termination notice period and will complete the transition across the full retail network within the next three years,” it said.
Julian Segal, Caltex Australia’s CEO and managing director, sought to play up the benefits of the rebranding exercise, including the return to an Australian-specific name.
“Ampol is an iconic brand in Australia and reflects our deep Australian heritage and expertise,” he said in the ASX statement.
“Our market research confirms that Ampol continues to be regarded as a high-quality and trusted brand by Australian consumers and resonates across our key customer segments.”
The company is also expected to save between $18 million and $20 million each year by virtue of not having to pay annual trademark licence fees.
Approval for the rebrand strategy will be sought from shareholders at its next annual general meeting in May 2020.
Even before the rebranding announcement, Caltex Australia was already in the midst of a company transformation strategy, which includes the axing of its franchise model to form a fully company-owned network of service stations and a rationalisation of this network with at least 50 sites earmarked for sale.
The company previously faced criticism of its franchised network of sites for poor compliance with workplace laws, after the Fair Work Ombudsman in early 2018 found a non-compliance rate among Caltex franchisees of 76 per cent.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.