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BP has announced plans to purchase Woolworths Petrol for $1.8 billion, spelling an end to Woolworths’ long-standing partnership with Caltex. It will likely also signal the end of BP’s extensive partnership with Velocity, the frequent flyer program of Virgin Australia.
As part of the deal, BP will acquire more than 500 Woolworths-branded petrol stations. If regulatory approval is granted, the sale is expected to be completed in early 2018.
While Virgin Velocity points can currently still be earned at BP, at least in the short term, our members expect that the partnership between BP and Velocity Frequent Flyer will end when the sale is completed. Going forward, it seems likely that BP customers will instead be able to earn Woolworths Rewards points – which can be converted to Qantas Frequent Flyer points – when filling up at the bowser.
Woolies points will be earned across all BP stations including those currently providing Velocity points. I can’t see Velocity being a part of it going forward… Maybe VA will do a deal with Caltex.
With Caltex likely to be left without a loyalty program partner, some members have speculated that it could look to establish its own relationship with Velocity Frequent Flyer. Others have speculated that Aldi may take advantage of the gap in the market, though at least one member does not see this happening.
Aldi certainly won’t establish an deal with any petrol retailer- that is a certainty as their business model doesn’t support those type of discount activities.
BP formed a partnership with Velocity Frequent Flyer in 2015, with BP customers earning 2 Velocity points per litre of fuel. In 2016, it also became possible to redeem Velocity points for petrol. Meanwhile, Woolworths Rewards points are currently earned at Woolworths-Caltex petrol stations and Flybuys points can be earned with Shell fuel outlets. The current arrangements will continue in the short term, but the sale of Woolworths Petrol will undoubtedly shake things up in coming years.
The deal is not expected to close until 2018 (and is subject to FIRB and ACCC aprovals), so at least a year away before anything much happens. And who knows what the ACCC will say…..
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