Self-supply ‘no more of a threat’ than a new water retailer

Self-supply is no more of a threat to water retailers than a new entrant to the market, Waterscan director Claire Yeates has insisted.

Speaking at Future Retail #2 – a conference held by Utility Week’s sister title Water.Retail – Yeates said the uptake in self-supply is a reflection of the service businesses are receiving from retailers. “It’s a challenge to retailers to improve their service,” she added.

In January, Water Plus chief executive Andy Hughes said the company would see it as a “failure” if one of its customers switched to self-supply. First Business Water managing director Nish Dattani added that there is an “element of threat” from self-supply, although the company itself is not actively targeting the types of large customer which may go for the mechanism.

At Future Retail #2, Yeates said retailers may not enjoy losing customers to self-supply, but this is symptomatic of a competitive market.” The purpose of this market is for people to have choice, and this is a choice that customers have made,” said Yeates, pointing out that some customers had opted not to self-supply as well, even after having discussions with Waterscan.

“It’s very niche, it’s not going to take over the whole market,” she insisted. She emphasised that it “isn’t for everyone”.

Also on the panel at the event was BT utilities commercial manager Matthew Power. Water is the “little brother” for BT, Power said, which spends just £6 million on the commodity, versus £280 million on electricity, so money was not the only driver for the company choosing self-supply.

Power said one of the major reasons it did was so it could speak directly to wholesalers, and to mitigate retailer price increases. Consolidation was another big reason. “Consolidated billing was a major driver for us. To get 13,000 paper bills every year is a big resource headache.”

He added that Cathryn Ross, formerly Ofwat chief executive who moved to BT as its director of regulation in July 2017, was very supportive of the company’s switch to self-supply.

BT is one of nine businesses which have licences to self-supply. The others are brewers Greene King, Marston’s, Heineken, and Stonegate, hospitality firm Whitbread, soft drinks maker Coca-Cola European Partners, laundry firm Berendsen, and Blackpool Council. Nottingham Council has applied but its licence has not yet been granted.