Threat to Sainsburys?

Cardew

http://home.bt.com/lifestyle/money/mortgages-bills/energy-companies-ordered-to-reveal-cheaper-tariffs-they-supply-11363964245094

The big energy companies must tell customers if they supply gas and electricity to other companies whose tariffs are cheaper than their own, regulator Ofgem has ordered.
Under so-called 'white label' arrangements bigger companies supply energy to companies who don't hold their own supply licence.
For example, Sainsbury’s Energy is powered by British Gas, while M&S Energy and Ebico are powered by SSE.
Current Ofgem rules state that suppliers have to tell their customers about their cheapest deal, but until now this has not applied to tariffs from white label brands.
Closing the loophole

This loophole will be closed from July.
Ofgem said any supplier selling energy via this sort of relationship “will have to be more transparent and tell customers what their cheapest tariff is, regardless of the brand they use”.
Based on current tariffs the change would mean British Gas would have to tell its customers that they could save by switching to Sainsbury’s Energy.
Currently the cheapest dual fuel deal form Sainsbury’s Energy, Fixed Price February 2016, would cost a household with average consumption £922 a year.
In contrast, British Gas’s cheapest tariff, Price Promise February 2016, would set the same household back £1,099 a year. That’s a difference of £177.
The new rules will apply to suppliers and any of their white label brands that offer a cheaper deal
However, white label brands will only have to include the partner supplier’s tariffs, if cheaper, but not the tariffs of other partners of the supplier.

I cannot see BG allowing Sainsburys to undercut them by such a margin in future.

Bluebirdman_of_Alcathays

For once Cardew, I disagree. For BG this Sainsbury's tie in is shoring up their market share - they are losing the switchers (only 95% are now with Big 6 compared to 99% a few years ago) to smaller suppliers, and plenty of those will go to Sainsbury's.

They will still continue to have the "stickies" who have their gas with BG and electricity with the legacy regional supplier, usually paying through the nose on standard tariff.

BG do all the leg work, billing customer service etc. I imagine the royalty fee they pay Sainsbury's is relatively low and will of course have been thoroughly costed.

Cardew

You may well be right, but if publicised enough some of the 'stickies' might change a 'habit of a lifetime' and switch.


The publicity would need to come from the Tabloids - or someone on East Enders/Coronation Street switching; perhaps Dirty Den or Ena Sharples could set an example;)

TIC of course!

stator

I agree this is unlikely to save anyone money, it will probably result in cheaper deals being withdrawn from white labels. You might see someone like BG set up a new company just to provide the white label suppliers, if the new company has it's own energy supply licence it would then mean BG don't have to tell their retail customers about Sainsburys deals etc. Just a waste of effort really.

Cardew

stator wrote: »

I agree this is unlikely to save anyone money, it will probably result in cheaper deals being withdrawn from white labels. You might see someone like BG set up a new company just to provide the white label suppliers, if the new company has it's own energy supply licence it would then mean BG don't have to tell their retail customers about Sainsburys deals etc. Just a waste of effort really.

I think that possibly will breach the conditions of the licence.


If it doesn't breach the conditions, it is clearly against the spirit of the new regulations and could be outlawed by Ofgem - after 10 years or so if they act with their usual inertia!