MSE News: British Gas kills off switch to Sainsbury's Energy loophole

edited 8 January 2016 at 3:37PM in Energy
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  • SystemSystem Forumite, Community Admin
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    I am confused. If British Gas and Sainsburys are separate trading entities then it is possibly against Competition Law for them to have any form of conversation about prices. If they are effectively the same Company, then I agree that there is little point in having two separate entities.

    The other thing that I am confused about is Martin's comment:

    "This new you-must-show-all-tariffs rule on the surface is a good move, but this backfire was easy to predict. It's something I've already spoken to Ofgem about, as big suppliers are less keen to offer collective switches now because the rules may mean they have to show the deals to all their customers.

    If this in the case, will collective switches sit above the maximum number of tariffs offered by each supplier? More worryingly, not only could this mean the end of collective switches by suppliers but it may also be the end of cash backs. I can see why MSE is worried. Conversely, many would argue that nothing is ever free, and the few that benefit do so at the expense of the majority.
  • Having joined the MSE collective switch to Sainsburys Energy ending next month I have had several Switch Now e-mails from MSE over the past 4 months suggesting I leave before the end of the deal. Having written to MSE and looked carefully at the figures it has always made more sense to hold on, at least until the 50 days before the end free exit. Of course I have been hoping MSE will look after the thousands, like me, who were part of this collective switch and offer us another collective alternative in the next few weeks. But as champions of better trading practices I do wish MSE would make sure it only sends us clear and consistent messages so we can feel like we are all in this together.
  • HutchinsfairyHutchinsfairy Forumite
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    Clairsdad wrote: »
    Having joined the MSE collective switch to Sainsburys Energy ending next month I have had several Switch Now e-mails from MSE over the past 4 months suggesting I leave before the end of the deal. Having written to MSE and looked carefully at the figures it has always made more sense to hold on, at least until the 50 days before the end free exit. Of course I have been hoping MSE will look after the thousands, like me, who were part of this collective switch and offer us another collective alternative in the next few weeks. But as champions of better trading practices I do wish MSE would make sure it only sends us clear and consistent messages so we can feel like we are all in this together.

    It would be virtually impossible to programmatically identify exactly who would be saving what with any reliability. It seems far better to send an alert (which is carefully worded) giving people a prompt to check their situation and make a decision with as much information available to them as possible.
  • minislimminislim Forumite
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    Do your current supplier not make a profit?

    yes they do. but unlike BG they show a sense of moral responsibility and manage to make profits whilst still providing the cheapest prices around.

    all we ever hear about in the news about british gas is record profits year after year.

    and thats even with their dwindling customer base.
  • gt94sss2gt94sss2 Forumite
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    Hengus wrote: »
    I am confused. If British Gas and Sainsburys are separate trading entities then it is possibly against Competition Law for them to have any form of conversation about prices. If they are effectively the same Company, then I agree that there is little point in having two separate entities.

    According to the Sainsbury Energy website it "is a British Gas website and belongs to British Gas Trading Limited (British Gas)."

    As such, I presume Sainsburys have little to do with the company apart from the branding - hence they are a white label operation.

    However, its not unusual for firms generally (not just in the energy sector) to have multiple brands all selling the same product at different prices.
    The other thing that I am confused about is Martin's comment:

    "This new you-must-show-all-tariffs rule on the surface is a good move, but this backfire was easy to predict. It's something I've already spoken to Ofgem about, as big suppliers are less keen to offer collective switches now because the rules may mean they have to show the deals to all their customers.

    If this in the case, will collective switches sit above the maximum number of tariffs offered by each supplier? More worryingly, not only could this mean the end of collective switches by suppliers but it may also be the end of cash backs. I can see why MSE is worried. Conversely, many would argue that nothing is ever free, and the few that benefit do so at the expense of the majority.
    Collective tariffs are not included/counted in the maximum 4 that can be offered by each supplier.

    However, its a bit rich for MSE to complain about this now - they campaigned strongly in favour of these changes - despite many of us warning that fewer official tariffs (and the introduction of collective ones as an alternative) would actually lead to less competition not more..

    Regards
    Sunil
  • edited 6 January 2016 at 6:18PM
    SystemSystem Forumite, Community Admin
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    edited 6 January 2016 at 6:18PM
    Thanks. It is pretty cleat though that if a company such as BG is forced to tell its millions of customers that a much cheaper collective deal with BG can be obtained via Martin's Next Biggest Energy Saving Switch that they are unlikely to want to pay a £60X Million referral fee. I can see why comparison sites may be worried.

    I hope that this is the start of a bigger shake up of this sector. I have just received a statement which states that I am on my supplier's best tariff. The problem is that I am not. My tariff has the same name as the supplier's latest version of this tariff but the prices on the new tariff are about 8% lower overall. I am not taken in by this but others may well be. Ofgem needs to show some real teeth.
  • [Deleted User][Deleted User] Forumite
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    minislim wrote: »
    yes they do. but unlike BG they show a sense of moral responsibility and manage to make profits whilst still providing the cheapest prices around.

    all we ever hear about in the news about british gas is record profits year after year.

    and thats even with their dwindling customer base.

    "Moral responsibility ", ok, you let us know who this supplier possibly can be ? I know from first hand experience why only BG are out there with a moral responsibility spending huge amounts on RPU services. They are the only supplier trying to stop theft, the only supplier to spend money on doing this.The others sit back on the cheap and pass on theft costs to us
    Can you explain then why they are the UKs largest supplier by a country mile with 15 million domestic customers, not dwindling at all if you add Sainsburys Energy which has always been a BG marketing move. SSE do the same thing with M and S. The next largest has 5 million, so they must be doing something right. I expect to see BG themselves now coming out with much lower tariffs on certain deals to counteract the loss of their white label brand low tariffs.
  • minislim wrote: »
    yes they do. but unlike BG they show a sense of moral responsibility and manage to make profits whilst still providing the cheapest prices around.

    all we ever hear about in the news about british gas is record profits year after year.

    and thats even with their dwindling customer base.

    Ooh the energy supplier with a conscience! I look forward to this one.

    If you're referring to one of the Eco suppliers, the largest of these bankrolls a multimillionaire to dabble with his football management dream, which wouldn't be the first, second or third thing I'd do if I gave a hoot about the planet.
  • minislimminislim Forumite
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    its OVO. who have consistently topped the cheapest polls on here.
    have excellent customer service.
    have contatced me twice over my contract to let me know there were potentially cheaper products on the market.
    and have reduced my direct debits three months after joining them as i was paying too much (even though it was still less than i'd ever paid before)

    now when i say moral responsibility i mean to the customer. not this green eco nonesence.

    of the 8 people i've helped switch 5 of them were elderly people who hadnt got a clue what they where doing.

    BG had never contacted them to let them know there was cheaper deals or they could reduce their costs.

    no they just sat back and sucked these people dry. people who might not have money to spare. no morals at all. just looking after themselves.

    ovo on the other hand from my experience are very good at communicating deals across.
  • edited 7 January 2016 at 10:26AM
    [Deleted User][Deleted User] Forumite
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    edited 7 January 2016 at 10:26AM
    minislim wrote: »
    its OVO. who have consistently topped the cheapest polls on here.
    have excellent customer service.
    have contatced me twice over my contract to let me know there were potentially cheaper products on the market.
    and have reduced my direct debits three months after joining them as i was paying too much (even though it was still less than i'd ever paid before)

    now when i say moral responsibility i mean to the customer. not this green eco nonesence.

    of the 8 people i've helped switch 5 of them were elderly people who hadnt got a clue what they where doing.

    BG had never contacted them to let them know there was cheaper deals or they could reduce their costs.

    no they just sat back and sucked these people dry. people who might not have money to spare. no morals at all. just looking after themselves.

    ovo on the other hand from my experience are very good at communicating deals across.

    Its on every BG/Sainsburys energy bill or statement that there are cheaper tariffs available elsewhere and within the BG structure. All suppliers have to follow Ofgems instructions to do this. None of them, including Ovo would do this off their own bat if they had a choice.
    I also have helped hundreds of people move to cheaper BG tariffs ( better than Ovos ) , mostly elderly or offline and they like meter readers like me to come round every 13 weeks or so to get to and read their awkwardly placed meters. I do a few for Ovo, they wont spend money on regular reads quarterly for the infirm and elderly. they will probably only show their face once a year if that. they won t want to knock their profits wasting money on meter readers. Only BG undertake quarterly reads, its one of the reasons they have a big following from the old school users
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