Originally Posted by
SylvesterCat
I think this is the point peat. I was involved in this industry at the time when Challenge & Gull entered, and when we were worried about others. At the time, the company I worked for responded, and its never looked back - maintaining its low cost base regardless of margins. History is repeating tho - increase in margins has attracted newcomers, with the added bonus of the majors scrapping it out for wholesale supply (this is a strong evolution of the market since the 1990's). Z is caught in no man's land - instead of building diversification by expanding out of NZ, they paid top $ for Caltex, have a high cost base compared with its fellow majors (BP, Mobil) and its smaller competitors and have seen margins erode as everyone scraps for market share. I hope they have a 'transformation' plan; they'll need it. I think things will get worse before they get better (although I do think things will eventually get better).