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UK Hospitality urges Ofgem to name ‘reckless’ suppliers

Trade body UK Hospitality has called on energy regulator Ofgem to ‘name and shame’ the suppliers deemed to be the worst offenders.

Hospitality sector energy suppliers
Some energy suppliers are refusing to work with hospitality businesses, according to UK Hospitality

The current cap on wholesale unit costs of electricity and gas for firms will expire at the end of March. It will be replaced with a new government scheme that offers a discount on wholesale prices.

UK Hospitality said the reduced level of support would add an extra £4.5 billion (US$5.5nbn) to bills compared with the previous scheme.

Since the introduction of the six-month energy support package for businesses in October 2022, UK Hospitality said it had ‘continued to raise the reckless behaviour of energy suppliers’.

The trade group noted that suppliers were offering rates well above wholesale prices, raising standing charges and asking for ‘eye-watering’ deposits. Some are even refusing to work with hospitality businesses, it noted.

The industry body called for ‘rapid and dynamic interventions’ from government-backed regulator Ofgem (Office of gas and electricity markets) to tackle this behaviour, which if continued, could lead to ‘mass’ business failures for the hospitality sector.

‘Outrageous sums’ 

UK Hospitality chief executive Kate Nicholls said: “The behaviour of energy suppliers over the past four months has been nothing short of disgraceful. It’s clear some rogue companies saw the significant intervention by the government to support business as nothing more than a cash cow.

“Day after day, we get more reports from businesses with another example of how an energy supplier is demanding outrageous sums of money to secure a contract on sky-high terms or, even worse, won’t even engage on a contract simply because a business works in hospitality.”

UK Hospitality called on Ofgem to publish the outcome of its inquiry into the non-domestic market as soon as possible, and name the companies that have ‘acted in bad faith’.

It said all examples of bad practice should be fined, and businesses should be able to renegotiate or cancel terms set by suppliers, as well as seek compensation where appropriate.

Energy suppliers who have customers on fixed contracts at more than double the government’s floor price should be forced to offer a renegotiation of contracts, UK Hospitality said.

The trade association also called for the end of the blanket withdrawal of quotes from energy suppliers to sectors.

Nicholls added: “I’m pleased that the government took our reports about this situation seriously and that Ofgem began its inquiry. However, we now need to see the conclusion of that investigation and urgent action as soon as possible.

“With support being greatly reduced from April, businesses are heading into the most perilous financial position yet.

“The worst culprits should be named and shamed by the regulator and all suppliers that have engaged in this sort of behaviour should be compelled to go back to their customers to renegotiate their prices.”

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