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ACS backs call for energy market investigation

27 March, 2014

The Association of Convenience Stores (ACS) has welcomed a proposed investigation into the energy market, calling for action to make the market fairer and more competitive for local shops.

The announcement made by the energy regulator Ofgem on Thursday 27 March recommended an investigation of the market by the Competition Markets Authority. Ofgem notes that profit increases and price rises have ‘intensified distrust’ of suppliers, and that an investigation is needed to consider whether the current state of the energy market acts as a barrier to competition.

Research conducted by ACS has shown that over a third of convenience retailers (36%) believe that they have been overcharged by their energy supplier, while almost one in four (23%) have reported difficulty in switching their contract or supplier.

ACS chief executive James Lowman said: “This investigation is long overdue. There are clear issues in the energy market which act as a barrier for our members, both in terms of trust and engagement with suppliers. The business marketplace is often seen as more competitive, but within the convenience sector there are still a significant majority of stores that are supplied by the ‘big six’ energy companies and it is important that the proposed investigation considers improving competition both for domestic customers and small businesses.”

Ofgem has announced that the investigation is intended to complement its work to make the market ‘simpler, clearer and fairer’ through the Retail Market Review, which has been ongoing since 2009.

Lowman added: “The progress made as part of the Retail Market Review has been positive so far, but there is still much to do to ensure that small businesses are not taken advantage of by their suppliers in the key areas of backbilling, rollover contracts and interaction with third party intermediaries (brokers). It is essential that Ofgem and the Government continue their work in these areas and introduce stricter measures to stop unfair contracts.

“We will be playing a full part in the market investigation, ensuring that the difficulties faced by convenience stores and other small businesses when dealing with energy companies are taken into account.”