Enterprise business process transformation manager Andrew Wilson said that publicans are unfairly treated by utility companies, during the committee meeting at the House of Commons.
Nine other energy managers from major UK businesses - including BT, Network Rail and Sainsbury’s – were present at the meeting, which took place the day after leaders of the UK’s largest energy companies were grilled by a group of MPs in Westminster.
Representing the pub sector, Wilson said while the Government’s statistics show price increases of circa 30% for electricity and circa 65% for gas for small businesses between 2007 and the end of 2012, the approach of many of the utility companies towards the pub sector has had a more adverse impact than just the spiralling price alone.
“Lack of tariff consistency and cost transparency is making it almost impossible to provide a completely meaningful comparison in pricing. This is particularly disadvantageous for publicans who as small business owners have limited time, resource and expertise to deal with these issues alone,” Wilson said.
“This often leads publicans to use energy brokers where lack of regulation and control can leave them susceptible to some questionable practices such as high rates of commission or excessive lengths of contract.
“Publicans being put onto ‘deemed out of contract’ rates with the existing supplier as soon as they take on a new pub is seen as anti-competitive, creating false debt and preventable hardship.”
Wilson said he supported the Government’s recent announcements calling to remove barriers to switching suppliers.
“What makes the situation worse is that the supplier will often offer to negotiate a back dating of a contracted rate to the day the publican took the pub, making it look more costly to transfer to an alternative supplier due to the value of the deemed rates for the transfer period,” he added.
“Making it possible for a supply to be switched in a matter of days rather than weeks would clearly make a huge difference to this matter.”
Utility companies changing the tariff for publicans with debt issues to make the on-going supply more expensive and/or adding excessive punitive charges to the account, was identified as a further key issue.
Wilson told the APPGEC, chaired by Lord Palmer, that licensees generally do not appreciate that a window of opportunity for termination exists to avoid automatic renewal until it is too late. He said publicans’ failure to place notice with their supplier at exactly the right time traps them into accepting whatever price the supplier then dictates.
He added that most of the issues highlighted were related to the supply of gas and electricity, but warned that many publicans face problems relating to the services of water companies and this situation was likely to worsen when water is de-regulated in April 2017.