‘Quasi monopoly’ fears raised over business supply market

Energy supply for businesses has descended into a “quasi-monopoly”, a Conservative MP has suggested in the House of Commons.

Robin Miller, Conservative MP for Aberconwy, used a Westminster Hall debate on the business supply market to raise concerns among hoteliers in his north Wales constituency that there is “very little if any real competition” amongst non -domestic retailers.

As a result, he said, hoteliers are reporting that suppliers are able to able to “act effectively as a cartel” by naming their price, which business must accept on a ‘take it or leave it’ basis.

“I question whether the non-domestic energy supply market is not now operating as a quasi-monopoly,” Miller said.

Miller added that it should be a “great concern” if businesses have “no bargaining position or ability to negotiate, or that supply periods are extended under pressure from suppliers”.

“Suppliers will not fight for customers who cannot go elsewhere,” he added. “They will not renegotiate contracts as an act of good faith when there are no alternatives for the customer to turn to.”

The House of Commons business and energy select committee heard concerns from hospitality businesses earlier this year over the limited number of suppliers willing to quote for non-domestic contracts.

Junior energy minister Amanda Solloway said the government is exploring an extension of the Energy Ombudsman’s remit beyond the smallest businesses.

Responding to a call during the debate for an extension of access to the watchdog for businesses, she said: “We are exploring how the energy ombudsman can support more businesses with their energy issues by expanding access to dispute resolution between customers and suppliers to more than just microbusiness customers.”

Solloway added that the government plans to consult on any proposed changes before any final changes are enacted and is holding discussions with interested groups.

Labour shadow climate change spokesperson, Kerry McCarthy said that the energy supply market seems particularly “stacked against hospitality businesses”

“We need both short and long-term action… although the actual peak of the energy bills crisis has dampened a little, the problems are still out there,” she added.