Dissapointing Article In MBY

[Gludy]

Despite the fact that I have refused to renew my subscription to MBY they keep sending me them! So I was surprised when the November issue dropped through my letter box this morning.

Anyway if I needed another reason to stop my subscription - which I do not, it is contained in the article on the inner back page from from Ray Bullman.

The basic theme of the article is that there may be some move towards slow displacment boats but "I feel the majority of us will reluctantly pay almost three times the current level of fuel costs and continue to cruise".

Whilst I accept that Mr. Bullman is fully entitled to his opinion, in my opinion, besides being totally out of contact with the reality for most boaters who simply could not afford to pay three times the price, Mr Bullman and the magazine actually do harm to the UK cruising power boat scene be encouraging a feeling that we will just swallow and it will be accepted.

With friends like this we do not need enemies. This encourages those who think they will simply raise many times the tax. If such an article was going to appear then it should have looked at the subject far deeper ... I am simply disgusted. but then this is what I have come to expect from MBY.

How out of touch with reality can a magazine be!!!! Or maybe MBY has no understanding whatsoever of the effects of such a fuel hike on the few hundred cruising power boats in Marinas like Swansea. as well as many other marinas and moorings dotted all around the country.





<hr width=100% size=1>Paul

 

[tcm]

hi paul

Whilst of course you know how i hate ever-rising taxes, there does seem to be some dreadful inevitability about taxes rising, and people doing nothing about it. What we need is a widescale revolt, and I am unsure about how to start one. So, if anyone has any decent ideas about how to start a revolt (non-peasant variety, please) i'd be happy to help out, but i am busy on saturdays cos the kids are at rubgy.

Meanwhile, i did a really ace piece about red diesel in the previous months's MBY, which lays out an indefatigable argument in favour of red diesel, and cheap boating in general. BUT no mention of it in the Gludy Chronicles of Impending Doom, sadly.



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[Gludy]

hi
I have to say I did not see the piece you wrote .. sorry

Between now and the date for red deisel dying for pleasure boats, there will be a general election. There really is everything to fight for.

I am just a bit fed up with the belly up style of resistance .... still tink the best way is as I have now outlined many times .....


<hr width=100% size=1>Paul

 

[Moose]

Buy a cheap tanker c. £100,000. Paint it bright Red, this may cost a bit but it would look good, er ok it wouldn't but it would stand out. Pay some skippery type person to take it up the Thames and park it Nose into the HoP, of course it needs to be big enough to reach the other bank so nobody can get past, perhaps we could fill the hold with Sulphur or something so it smells really horrid. Am I nearly there?

<hr width=100% size=1><A target="_blank" HREF=http://www.phantom37.co.uk>http://www.phantom37.co.uk</A>
Moose

 

[steverow]

Then scuttle it.
That'll make em sit up and listen.


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[[2574]]

Gludy,

The real problem is that there is no political clout at all in this group. The voter numbers are too small to have the slightest effect on the election and there is also no material government economic argument to be had. The political message would have to be "we want to continue to give untaxed fuel to folk who have bought a £100k motorboat" - can you imagine the headline in "The Daily Mirror" the day after a Hampshire MP stands up and says that? Political suicide. I know it's not that simple, and there's a lot of folk in £10k cruisers that will also be hit, but the electorate will see boat owners burning large quantities of fuel as environmentally negative and also that "they can afford it anyway; I have to pay it for my car so why shouldn't they pay it for their motorboat" and the argument is indefensible.

I've just sold out of motorboating because I see diesel at three times the current price as inevitable - and I can't afford to keep boating at that price.

rob

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[Gludy]

"I've just sold out of motorboating because I see diesel at three times the current price as inevitable - and I can't afford to keep boating at that price"

You will not be the first and the very fact you have done that shows how out of touch those who say we will carry on as before really are.

As regards all of your points, the fact is I agree with 90% of what you have said. This is why I do not see public protests as anything but negative.

The real arguments against it are practical ... I have outlined them so many time i will not repeat them here.

So how do you feel about those who say we will pay 300% to 400% more and just moan about it?



<hr width=100% size=1>Paul

 

[[2574]]

"So how do you feel about those who say we will pay 300% to 400% more and just moan about it?"

I see these folk as passive and inactive for reasons I don't entirely understand. They must be pretty wealthy to be able to deal with this kind of cost increase to a leisure activity but more than that, being able to stand aside and accept that the capital value of their boat is probably going to take a hit shows that they must have capital wealth a fair way beyond mine. I sold out of my Targa 39 because the potential capital value loss will be approaching £30k (in my view) and I could do without that "own goal". I worry about folk buying boats on marine mortgages - negative equity comes to mind!

I have to say that I think the boating industry in the UK is being highly complacent about this whole issue - I have seen nothing from Sunseeker, Princess or Fairline but maybe that is because 90% of their output is exported so it's of little consequence to them. But I would expect the UK marina operators to be revising forecasts for the future as I see demand from the motorboat brigade to be softening in the medium term. In marinas like MDL's two Torbay marinas there is a greater than 50% occupancy by motor boats - and this change to my mind represents a significant risk to occupancy rates.

This whole equation comes down to bare facts - I keep my boat in Portsmouth and a round trip to Yarmouth in my Targa (now sold) for lunch will cost about £160 with diesel at £4/gallon. That's just darned silly, there's no other word for it.

Rob

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[Gludy]

I do not believe they all can afford it ... its a sort of clinical denial.

As you say, you just have to look at the marginal cost of a trip you know and multiply it by 3 or 4 ... that makes it all silly. Trips just cannot be justified.
I agree with your analysis and I am sorry to learn you have left motor boating .... you are at least acting rationally



<hr width=100% size=1>Paul

 

[halcyon]

Has anyone asked the fuel sellers if they are planning to carry on selling fuel?
After all increasing stock cost by 300/400% on a low profit item must have an impact on cash flow. Then if they want to sell both fuel options, the cost of new tanks, pumps and pipework, then there is the fuel stock level.
My other worry is that even at 400% price rise, will you be able to find some?

Brian

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[Gludy]

I really think the fuel sellers have not thought about it much - in fact most people will be in denial until it happens.

Not many will be able to offer 2 fuel types and even offering one will either lose the pleasure or the commercial side - hence I do see real practical difficulties.

Add to that the extra income for fuel will not be so much in profit but in paying Mr. Brown and allow for the reduced sales - you are looking at stopping one part of your sales totally and greatly reducing sales if you choose to supply pleasure boats ..... it would frankly be uneconomic for many pumps to exist!

The boat market will no longer be fed with folks entering motor boating and buying in at the bottom and that will work its way up to new boat sales. This is why firms like Fairline who operate on slim margins would still be hit by the loss of even 5% of sales let alone 10%.







<hr width=100% size=1>Paul

 

[halcyon]

The problem I see if say they stay with red, sales are down ( no pleasure ) you have no cost penalty, lower turnover, lower stock value and lower profit value, slight increase in profit margin to cover maintance and your break-even.
If you drop red and stock green ( or whatever ) your stock level just went up 300/400%, your sales have come down, ( no red and you must allow reduced usageof green ), but running costs have stayed constant. So you need to cover the tax, you need to increase price to maintain the profit margin on purchases, you need to increase cost to cover maintanance costs.
So green means a lot more costs, and a lot more moaning from the pleasure trade, so unless you have a large captive market, ie a large marina, it's better to stay red or not sell diesel. If you have a captive market you can charge what you like, or sell to your customer's at a reasonable price, and the flease visitors.
Locally, within 2 mile of us, during the lost 10/12 years we have had about 8/10 garages stop selling petrol, leaving only 4, I see no reason why the marine sector should be different.
Can you see a 60 foot motor boat owner carrying fuel in cans from the local garage??

Still worry that it will end up not cost, but availabillity.

Brian

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[BrendanS]

Stock level up? how?

<hr width=100% size=1>Me transmitte sursum, caledoni

 

[[2574]]

Not stock volume up, but stock value, which in the operators eyes amounts to the same thing. So, say the tank holds 30k litres - value now is £6k, value with white diesel is say £24k. Additional working capital required therefore £18k and assuming a cost of capital of 12% that's additional financing cost of £2,160. Assuming margin on fuel is 13ppl there is a requirement to sell a further 16k litres just to cover the stock carrying cost.

rob

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[Gludy]

"Still worry that it will end up not cost, but availabillity."

It will end up both - cost will be 3 to 4 times and availability will be difficult.

I repeat that the UK cruising boat market will be devastated. The chancellor will not collect more tax but less. The administration of the system will be a nightmare. Red will still legally be showing up in tanks for years.

My fear is that the government will not understand the real issues here and so act in a way that will destroy the power boat industry without gaining any of its objectives.

We live in a world of what looks right at surface value is more important than what really is right.

I like the way some talk about UK boat makers not being affected too much because most sales are export as if a 10% drop in Fairline/Princess/Sealine sales would not hit them hard when in practice some of them such as Fairline make a minimal return on their investment. A 10% drop in anyones sales would hit hard.





<hr width=100% size=1>Paul

 

[halcyon]

Which results in, stay red and minimise cost and problems, or not bother selling any colour diesel.

Brian

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[Gludy]

Yes - probably right but of course they are then still on reduced sales with only commercial boats fuel to sell. Its a no win situation.

<hr width=100% size=1>Paul

 

[halcyon]

Thats what I been saying for months now, every one see's fuel going up to pump prices, full stop. But the price is only a base price, marine outlets can sell at any price they think fit, look at petrol prices. I think £1.20/1.50 a litre not being unresonable, allowing for increased operating cost in the marine area, i.e. not self service, floating distribution outlets, more corrosive enviroment, much lower sales levels, etc, etc. So £6 a gallon is not a unreasonable price to expect.
As a raggie it's not much of a problem, very rarely us a tank a year, so a fuel can is ok.
But most of our customers are OE boat builders, so I am directly envolved from that side, if there is a significant drop in UK production, we see a direct drop in our sales. So we are now working on new web site and over the next 12 months, looking to increase retail sales as a back-up.


Brian

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[Gludy]

I have also been saying the same and I agree - prices would rise well above raod fuel price if the duty was increased to road fuel prices.

I am pleased that you also see that it would effect your business, some around here reckon it will have no effect!!



<hr width=100% size=1>Paul

 

[robind]

Given that at the moment boats (all boats over say 30 foot) are a luxury second holiday home, and at present they do not attract any form of "poll tax"unless lived on full time. With the increased expected inactivity due to the red diesel hike in price. How long before they become a target for local councils starved of the governments funds allocations, So which party is going to stick its neck out? there is not enough difference to choose from at the present so the first one to say that it will not comply with the EEC ruling (in may things not just red diesel) gets my vote, bring back the monster raving looney party!! David Sutch was it?
Rob

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