BUSINESS

Couche-Tard shareholder meeting turns test over anti-union stance

10/05/2012 06:18 EDT | Updated 12/05/2012 05:12 EST
LAVAL, Que. - The chief executive of Alimentation Couche-Tard got into a testy exchange with some shareholders at its annual meeting Friday over the convenience store giant's anti-unionization stance.

Alain Bouchard cut off a union leader and shareholder who sought an explanation about the company's fight against efforts to unionize several of its stores in Quebec.

"You are out of order. Next question," he said, before a security guard switched off the questioner's microphone and unsuccessfully tried to remove her from the room.

The exchange prompted a long-term shareholder to admonish the company founder about his attitude and the negative impact it could have on Couche-Tard's (TSX:ATD.B) public image.

Arthur Dube, 82, said Bouchard should respect the right of shareholders to ask questions and respond rather than try to prevent someone from speaking

Earlier this year, the convenience store chain put a location in St-Liboire up for sale after workers obtained union accreditation.

Sylvie Joly, a representative for the Confederation of National Trade Unions who asked the questions, said Bouchard also rejected her request to meet to discuss the impasse. She also said an employee was barred from entering the meeting despite holding a shareholder proxy.

Joly said Bouchard's actions at the meeting make her doubtful that the strong unionization of recently acquired Statoil Fuel & Retail will prompt any change in Couche-Tard's anti-union stripes.

Bouchard later told reporters that Joly and several sympathizers who spoke should have simply asked questions instead of trying use the meeting to make editorial statements.

Chief financial officer Raymond Pare added the annual meeting wasn't the suitable place for those questions that affected just a few stores in Quebec.

"It's not necessarily the appropriate place to do this," he said after reporters were warned not to ask any questions about unionization. "It's a subject that affects seven of our 12,000 stores."

Meanwhile, the company said it continues to look for acquisition opportunities in Canada, the United States and Europe.

While he wouldn't say if Couche-Tard is interested in buying Valero Energy's retail Ultramar business, Bouchard said such a bid would like face challenges from the Canadian Competition Bureau because of possible concentration of stores in Quebec and the Maritimes.

"It's not impossible," he said, when asked if Ultramar was too large given Couche-Tard's elevated debt resulting from the $2.8-billion acquisition of Statoil.

Added chief operating officer Brian Hannasch: "The priority is to fill in our existing footprint and create density and share in those market."

Couche-Tard said it is also testing the sale of its own U.S. soft drink brand in Canada as it continues to push higher margin private label brands.

The Quebec-based convenience store chain is selling Polar Pop in 40 stores in four markets — Gatineau and Trois-Rivieres, Que., Red Deer, Alta., and Okanagan Valley, B.C.

"We are cautiously encouraged with the results so far," Hannasch said six months into the test.

Couche-Tard's U.S. Circle K stores also sell its own brand of coffee and cigarettes.

The company moved to launch the Crown cigarette brand after tobacco giant Phillip Morris forced price and margin reductions. There are no plans to sell the brand in Canada because the cigarette companies haven't adopted the hostile strategy.

Couche-Tard is looking at introducing other private label brands such as snacks that are not as brand sensitive, motor oil and windshield washer fluid.

The company's focus on higher margins has seen sales of fresh food items increase by more than 10 per cent annually over the past several years.

It expects to harness the expertise from Statoil to improve those results more in the coming years.

On the Toronto Stock Exchange, Couche-Tard's shares closed at $48.50, up $2.83 or 6.2 per cent in Friday trading.

Couche-Tard's shares have surged since the Statoil acquisition and increased 247 per cent since January 2009 as it continued to deliver strong profits despite the economic challenges in the United States.