The Los Angeles Times gets in on the boycotting-BP-just-hurts-small-businesspeople meme. It’s better than some of the other stories we’ve seen in this genre, but it still swallows some BP spin uncritically.
BP and the gas-station owners would love for you to believe that these are just mechanics made good—small businesspeople.
“We would hope that people wouldn’t penalize those local businesspeople who had nothing to do with the spill,” (BP flack Scott) Dean said.
But that’s not always the case. Here’s the LAT:
But most of the BP and Arco service stations are run by independent owners, usually with one or a few outlets…
Since the gulf oil disaster, protests and boycotts have cost BP service station operators as much as 20% of their normal business, said John Kleine, executive director of the BP Amoco Marketers Assn., which represents 475 independent service station owners east of the Rockies.
That 475 number comes two graphs after the LAT says there are 9,700 BP-affiliated stations east of the Rockies. By my math, that’s an average of more than 20 stations per owner. Hardly a small business, although that could be high if there are a handful of mega-owners.
And apparently BPAMA represents almost all BP owners in its region, according to its own numbers.
The LAT also doesn’t mention that BP does indeed make high-margin money off its franchisees, as I wrote last week:
I’m guessing that BP doesn’t just let any old body slap its name and logo on their filling stations. Presumably, it charges a franchise fee and gets a cut of any revenue. Maybe not much for a station or two, but BP has 10,000 affiliates in the U.S. alone, the WSJ reports.
Indeed, a quick Google search finds that at one of BP’s brands, am/pm, the franchise fee is $70,000 plus an ongoing royalty stream of 5 percent revenue (that excludes low-to-no margin gasoline sales).
So if you’re buying candy at a BP franchised station, you’re giving high-profit-margin money to BP. If you’re serious about trying to avoid giving them money, you have to weigh that against the harm you’re doing the business owner (who, let’s face it, is probably not a small businessperson. The Journal quotes the president of Carroll Independent Fuel Co., which purchased most of the 110 BP stations in Baltimore “in an effort to bank on BP’s strong brand name and its push toward an environmentally friendly image”).
— Further Reading:
WSJ Comes Up Short on BP Boycott Effects. Some of these stories read like PR plants.
Beleaguered Pensioners: It’s a good thing that BP investors are taking it on the chin.
The Journal Excels on BP: An investigation shows the company repeatedly cutting corners in the GulfRyan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at firstname.lastname@example.org. Follow him on Twitter at @ryanchittum.