Under a temporary arrangement put forward by the energy regulator, white label suppliers – organisations that do not hold a supply licence, but instead work in partnership with a licensed supplier – had their tariffs included as one of the four tariffs offered by their parent supplier.
In a consultation, Ofgem proposed to “treat white labels as separate from their partner supplier” and to not set a limit to the number of white labels that a supplier can have.
The regulator also proposed that the parent supplier must inform their customers – using the parent company brand – of cheaper deals offered by one of their white label suppliers as part of the obligatory Cheapest Tariff Message (CTM) on customer bills and other communications.
For the white label supplier, the CTM will have to include the parent supplier’s tariffs if they are cheaper, but not the tariffs of any other white label suppliers.
Reacting to the consultation, Tom Lyon, energy expert at Uswitch.com said: “Increased choice for consumers is a good thing but there is a danger that Ofgem could be throwing the baby out with the bathwater.”
He added: “We would be concerned if this ruling means British Gas and SSE make their ‘white label’ tariffs less competitive in future to avoid having to advertise them on their own bills.”
The consultation closes on 6 November 2014, and the proposals are expected to be implemented in the first half of 2015.