UK business criticizes energy companies for plunder tactics

With more than 500 stores across the UK, Iceland is heavily dependent on energy due to its huge number of fridges and freezers. Photo: Iceland

Gas and electricity suppliers have been accused of profiteering and discrimination by companies including Iceland and Burger King.

British businesses have raised concerns about the behavior of gas and electricity companies in their filings to the energy regulator. The sector has come under increasing scrutiny after the energy crisis sent bills skyrocketing.

The complaints were made to Ofgem as part of a «bad behavior» investigation it launched earlier this year to determine the extent of supplier misconduct.

Iceland, which has more than 500 stores across the UK and relies heavily on from energy due to the huge number of refrigerators and freezers, said: “Suppliers are trying to eliminate every element of risk from their business, passing it directly to their customers. < /p>

“Customers will then have no choice but to pass on or cover these costs to those who can. The first option is exacerbating the cost of living crisis, while the second could lead to the collapse of many businesses.”

The retailer said suppliers were charging exorbitant fees to secure energy contracts and were also unfairly withholding security deposits worth hundreds of thousands of pounds.

Iceland said: «Having chased this with the supplier every day for the last 2 months there is still no confirmation as to when this money will be returned.»

Burger King also criticized the energy sector for the «lack of willingness of suppliers to provide price quote or offer for our business.” «

The fast food giant said it had only been able to find two suppliers to secure gas supplies.

Other, more serious claims have been made by smaller firms and organizations.

For example, energy brokerage Utility Aid reported that some of their clients were cut off from suppliers «because they were not-for-profit organisations».

This concern was echoed by Business Energy Direct: «Many suppliers continue to refuse to offer contracts to certain sectors . Unreasonably high prices are a testament to the entire industry, and customers continue to be charged far higher prices than any supplier can justify.»

Damon Parker, senior partner at Harcus Parker, the City law firm bringing a £2bn claim against suppliers for allegedly overcharging business customers, said: “The evidence provided to Ofgem by energy customers is damning. Business customers are being ripped off every day.

“In a time of high inflation, we need proper checks and controls on the industry to ensure they don't take advantage of rising prices to increase their own profits at the expense of their customers.”

A barrage of criticism was heard in materials published on the Ofgem website. The regulator said it has since been trying to resolve the issues by «introducing more effective complaints handling between suppliers and businesses.»

An Ofgem spokesman said: «These initial views were in response to the early stage of our biggest deep dive into external energy market.

“We have since received more recent responses to the proposals we published in July, with positive feedback from consumer groups. We carefully consider all responses received.”