A campaign calling for fair play towards retailers on energy contracts is launched today by Independent Retail News.
The issue is top of many retailers’ agendas at present, largely due to the high cost of energy and anger at the ability of utility companies to roll over businesses onto new contracts – often at inflated rates – when their existing deal ends.
Retailers then find themselves locked into these unfavourable rates for the next one to three years.
A survey by Independent Retail News earlier this year found that a quarter of independents had seen utility bills rise by up to 19% over the past 12 months, while one-third experienced hikes of 20% to 39% and nearly one in 10 had seen increases of 40% to 59%.
Energy is also the subject that generates the highest number of calls from retailers both to the Association of Convenience Stores (ACS) and to the Independent Retail News Actionline problem page.
A survey by the ACS in June revealed that one in five businesses receives inadequate notice that their energy contract is coming to an end, one in 10 had received backdated bills and one in four were initially offered unfavourable renewal terms on their energy contract.
And the need to protect businesses against unreasonable energy contracts emerged as one of the highest priorities in the recent ACS Heart of the Community Vote, where convenience retailers were asked to name their top priorities in the run-up to the next general election.
Independent Retail News believes there is an urgent need for retailers to be treated more fairly when it comes to energy contracts.
This includes a clear, consistent and transparent information from energy companies, an end to roll-over contracts and an end to back-dated bills if the energy company is at fault
The Fair Play on Energy campaign is being backed by the ACS. Public affairs director Shane Brennan said: “Energy is a dramatically increasing cost to retailers and we’re seeing so much inconsistency and bad practice from energy providers that it’s costing retailers thousands of pounds that they can’t afford.”
Energy regulator Ofgem raised hopes in April when it said it wanted a ban on automatic roll-over contracts, but later sparked retailer anger by watering down its proposals in the face of protests from the ‘big six’ energy companies.
Instead, it proposed roll-overs should be limited to 12 months.
Ofgem’s final findings are due out this autumn, and if the regulator fails to ban automatic roll-overs, Independent Retail News believes there should be a full inquiry by the Competition Commission into the energy market and whether it is working in the interests of its business customers.
A further major concern is energy companies’ handling of customer complaints and billing errors.
Retailers such as Jonathan James have faced crippling back-dated bills after being under-charged for energy – with some even forced to sell their business as a result.
Ofgem must act to stop tactics like threatening phone calls and premature use of bailiffs, and energy companies need to improve their record keeping.
You can back our Fair Play on Energy campaign by emailing your experiences and messages of support to david.shrimpton@metropolis.co.uk.
