Applegreen dealer claims agreement with service station chain not legal

An Applegreen dealer who has been fighting a long-running legal battle with the service station chain has claimed that the agreement he has with the group is not legal.

Apple Red Service Station Ltd, controlled by businessman Alan Flynn, has been defending a High Court action for breach of contract by Petrogas Group Ltd, part of the Dublin-listed service station group, for more than a year.

Mr O'Flynn claims that the dispute is rooted in the fact that Applegreen increased the cost at which it wanted him to sell fuel from a service station that he previously ran in Finglas in Dublin.

He said that the move hit sales as customers stopped using his outlet and went to other, cheaper service stations nearby, damaging his business. However, Applegreen’s head of dealer business Dáire Nolan told the court that Mr Flynn refused to sell fuel at the low cost set by the group.

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Mr Flynn’s company was one of the service station group’s dealers. Under this agreement, it sold motor fuel at price set by Applegreen in return for a four cent commission on each litre sold.

Applegreen set the price to undercut nearby competitors, part of its “lowest price” pledge to customers. It is understood to have a similar arrangement with a number of other operators, who either own or lease their service station sites.

Competition law

In an affidavit sworn by Mr Flynn, he states that this type of agreement is contrary to competition law and is thus void. He based this statement on a ruling made by the court at an earlier point in the case.

Following the latest hearing in the case, the businessman said that this could have implications for similar agreements between Applegreen and other dealers.

However, Mr Nolan challenged this in a replying affidavit and said that the claim was “bereft of any merit”. Applegreen said in a statement on Monday that it was “fully satisfied with the robustness of its contract agreements” with its dealers.

Mr Flynn said the dealership arrangement originally worked well. Court documents show that the business was selling more than 40,000 litres a week.

However, he maintains that early last year, Applegreen increased the price at which it wanted him to sell the fuel, which hit turnover and the commission that he was earning.

In response, Mr Nolan told the court in an affidavit that Apple Red increased the price itself, contrary to the agreement between the two sides.

Fraud allegations

Applegreen is alleging fraud and deceit on Mr Flynn’s part. The group maintains that he told its representatives that he had a new tenancy on the Finglas site when he did not. His tenure on the site was important as the agreement between the two ran for five years.

Mr Flynn says that he did in fact have a new tenancy but the dispute with Applegreen forced him to give it up, and that he has documents support this. The group has since left the service station and the site is vacant.

In a statement, Applegreen said: “As the matter is currently going through the legal process, Applegreen is not in a position to comment in detail on the matter. Suffice it to say that this relates to a breach of contract by a former dealer of Applegreen.”