The UK regulator – OFGEM – has announced that suppliers who sell energy using ‘own-brand’ electricity and gas in the retail energy market will have to tell customers what their cheapest tariff is – irrespective of what ‘brand name’ they use.
‘White label’ organisations do not hold a supply licence in their own name and instead work in partnership with a licensed supplier to offer gas and electricity using their retail brands – for example, ‘Sainsbury’s Energy’.
Under OFGEM regulations, suppliers already have to tell customers about their cheapest deal, but until now this rule has not included ‘white label’ tariffs.
With effect from 1 October 2015, all energy suppliers – including the ‘white labels’ – must tell customers about their cheapest tariffs, regardless of the brand they use to market the tariff.
This supports transparency around the relationship between supplier and white label so that consumers are told what their cheapest deal is with their licenced supplier, whatever brand it is marketed under.
Under OFGEM’s new rules, white labels will have the same flexibility as their partner suppliers in areas such as the number of tariffs and types of bundles they can offer. This will make it easier for new companies to enter the energy market.
The decision on white labels unlocks further opportunities for consumers to engage with the market through well-known household names and innovative brands, while retaining the additional protection that OFGEM has put in place for consumers.
Rachel Fletcher, OFGEM senior partner, said: “Selling energy through white label brands has the potential to increase consumer choice and engage consumers to shop around through well-known brands.
“But it is important that consumers are given the complete picture about all their supplier’s tariffs.
“Transparency about the cheapest tariff that a supplier offers is important in rebuilding consumer trust in the market.
“We are acting to reduce barriers to white labels entering the market and to ensure suppliers tell their customers what the cheapest deal is for them, whatever brand it is marketed under.”
Consumers are increasingly switching away from the Big Six suppliers which dominate the UK retail energy market in protest at the issue of ‘prices racing upwards like rockets, but falling like leaves’ when wholesale prices fluctuate.
Energy Secretary calls for lower energy prices from the big six – Scottish Energy News (2 Jun 2015) – http://goo.gl/LxPjrG