Many mergers have taken their toll on the Beacon brand. While the brand grew during the 1990�s under Ultramar ownership, things began to stagnate by 2000, after Ultramar and Diamond Shamrock merged. One of the problems was the Exxon Refinery that had been supplying the Beacon Stations in northern California was sold to Valero, so Ultramar had to find a new supply point for the stations since they had no refinery of their own in northern California. In late 2000, it was announced Ultramar Diamond Shamrock would purchase the much-troubled former Tosco refinery in Martinez. They renamed it the Golden Eagle Refinery and announced they would be expanding the Beacon Station Network in northern California. Not too long after, later in 2001, Beacon�s then-owner, Ultramar Diamond Shamrock, announced it was merging with Valero. Since both Valero and Ultramar operated refineries within northern California, one of the refineries was to be sold in order for the two companies to merge. It was determined that Ultramar�s refinery would be sold. Along with Ultramar�s refinery, the government also decided that 69 corporate owned Beacon Stations and 1 corporate owned Ultramar station would have to be sold along with the refinery. The station sales were determined in this way, according to an email reply from Valero:
�The 70 units are company operated stores only. Geographically they are from
San Jose, Tracy, Manteca, South Shore Lake Tahoe north. Excluded would be
any company operated stations in or south of Santa Cruz, Morgan Hill, or
Modesto.�
Tesoro was announced as the buyer for the refinery and after some snags, finally closed sale on the refinery in June 2002. Part of the agreement was that Tesoro would have the Beacon Stations they purchased converted over to the Tesoro brand by October. Later in the summer, Tesoro announced they would be selling the Beacon Stations in order to raise cash; buying the expensive refinery was biting off more than they could chew in a tough low margin environment when the company was losing a lot of money operating the refineries. The stations continued to operate as Beacon well past October. Finally in December, Tesoro announced they had reached agreements to sell the stations. Basically 2/3 of the stations went to a partnership between USA Gasoline and some group called Green Valley Gasoline, and the other 1/3 went to Nella Oil. The interesting thing about Nella is they are the family that originally founded Beacon back in the 1960�s.
Around Feburary, USA began converting the stations they and Green Valley had acquired over to the USA Gasoline Brand. These conversions involved some banners, some metal signs, and some paint. Even still now in August, many of the USA Stations retain the same �just converted� look, and inside the convenience stores, the employees continue to wear Beacon uniforms, but usually with a name tag covering where it says �BEACON.� USA also continued to use the Beacon store numbers for the stations acquired.
The 22 stations acquired by Nella remained branded Beacon (well, one in Concord was branded Ultramar) until late 2003, nearly 18 months after Valero first released these stations from being corporate owned. They sold some of them off to individual owners. More information is coming.
In early 2003, many franchised Beacon Stations dropped the Beacon brand and became unbranded. Franchise stations around the bay area and rural northern California nearly disappeared. The two Nevada stations disappeared as well. It was said that Valero was eliminating the Beacon brand in favor of the Valero brand. All Beacon/Ultramar UltraCards were replaced with new Valero-Beacon credit cards. The new cards have the same account numbers as the old ones and are still recognized by the payment systems as �DIAMSHAM PROPRIETARY� cards. Problem being that the Valero brand is being positioned as more of a premium brand, not a discount brand. Valero is very concerned about station appearance; they want all stations to have a fresh, modern look. Doing this to a lot of the Beacon stations would require a major investment. A few Beacon Stations have converted to Valero, such as those in Stockton and Gilroy. Supposedly Valero has since decided to continue operating with the Beacon name. But that doesn�t make up for the damage done in rural northern California, Nevada, and the bay area.
In November 2003, Valero began converting their remaining corporate owned Beacon locations over to the Valero brand. Initial conversions include Stockton, Tracy, and Manteca.
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