BBPA: Ofgem is acting too slowly to save UK businesses

By Gary Lloyd

- Last updated on GMT

Call to step in: BBPA CEO Emma McClarkin says energy suppliers are being allowed to profiteer
Call to step in: BBPA CEO Emma McClarkin says energy suppliers are being allowed to profiteer

Related tags Finance Pubco + head office Multi-site pub operators Property Social responsibility

Energy regulator Ofgem is moving at “glacial pace” when it comes to disciplining suppliers and putting hundreds of thousands of businesses on the verge of collapse, according to the British Beer & Pub Association (BBPA).

BBPA statistical analysis

  • From 1 April, the average pub is expected to pay almost £20,000 more annually for their energy bills (this is based on a pub with a weekly turnover of £9,000) 
  • On average, pubs have had to increase turnover by at least 11% just to break even, not to turn a profit
  • Wholesale energy prices are, on average, lower now than they were in March 2022 but these wholesale price drops are not being passed on to customers locked into extortionate contracts 

The trade body said Ofgem’s lack of urgency in enforcing a fair and sustainable energy market for non-domestic customers is putting UK-wide businesses at risk of failure due to the unacceptable conduct of energy suppliers.

Following news Ofgem has introduced measures to protect some domestic customers from the forced installation of pre-payment meters, the BBPA has noted the regulator is not moving fast enough to introduce measures to save millions of businesses from failure in the coming months.

The call follows a string of similar alerts in recent days by business groups representing all industries with the BBPA insisting Ofgem must step in to instruct suppliers to offer renegotiations of contracts for businesses.

Act now

With just weeks to go until energy bills come in at the increased rate since Government support fell away on 1 April, the BBPA is insisting Ofgem act now or risk businesses in key sectors in every part of the UK closing in the coming weeks and months.

A call for evidence was launched by Ofgem earlier this year requesting feedback from non-domestic energy users to identify potential failures in the market, any statutory changes are not due to be implemented until winter of this year.

BBPA chief executive Emma McClarkin said: “The alarm has been raised for months and, in the next few weeks, we will see just how severe the damage to pubs and brewers and thousands of other valued high street businesses is due to this energy crisis.”

Failure to adequately regulate

She continued: “Ofgem’s failure to adequately regulate energy suppliers that are profiteering at the expense of small businesses and domestic customers alike is astonishing. Swathes of community-minded, cherished businesses will be wiped out and high streets decimated if nothing is done.

“The fact they’ve stepped in to protect domestic customers shows it can act on misconduct but is doing very little to respond quickly to the hundreds of examples provided by our industry and others of unfair charges and unacceptable behaviour by energy suppliers to business customers.

“At the very least, renegotiation of contracts must be offered to those businesses who were forced to sign up to extortionate tariffs and are now completely unable to afford the costs following the reduction in energy support from Government.”

Related topics Legislation

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