First Utility tells CMA white label deals are ‘anti-competitive’

Independent energy supplier First Utility has raised concerns with the Competition and Markets Authority (CMA) that white label energy deals are anti-competitive, providing the big six with an extra tariff.

In a submission to the CMA investigation into the energy market, First Utility labelled white label deals as a “convenient workaround of the Retail Market Review (RMR) four tariff rules” that provides the big six with an extra acquisition route to customers above the four tariffs currently allowed under RMR.

It said that the major suppliers’ ability to cross-subsidise short-term attractive acquisition tariffs offered through white label branding with the higher Standard Variable Tariffs (SVT) offered from the core brand was “a major barrier to expansion” to smaller energy companies.

First Utility said the mirroring of tariffs between the big six and their white label counterparts was evidence that the tariffs were linked and white labels were not operating independently.

First Utility said: “If white labels were to operate separately and distinctly, we believe that SVTs would never be the same. On this basis, we are concerned that the big six may be using their white labels as a tool to simply switch on and off aggressive acquisition tariffs, whilst leaving disengaged consumers of the licence holder on a high-priced standard tariff.

“This further undermines the principles behind the regulations, aimed at rebuilding trust in the market, and also is in contrast to claims by the big six suppliers that their white labels providing greater choice to consumers.”