The British Independent Retailers Association (BIRA) has joined forces with seven other leading associations to sign an open letter urging Ofgem, the energy regulator, to take immediate action on hidden charges imposed by energy brokers.
The associations argue that businesses they represent, particularly those heavily impacted by the pandemic and the cost-of-living crisis, are being taken advantage of in the face of escalating energy costs.
The open letter, organised by not-for-profit energy consultancy Box Power CIC, includes signatures from prominent groups such as UKHospitality, Care England, the British Retail Consortium, the Federation of Independent Retailers, the Association of Convenience Stores, the Independent Care Group, and the National Council for Voluntary Organisations.
The letter raises concerns over the unchecked continuation of excessive commission fees levied by unscrupulous brokers, negatively impacting businesses struggling to cope with economic challenges.
In one example, Box Power CIC found a staggering commission fee of £12,000 applied to a £49,000 contract for a care provider operating 16 care homes, serving up to 1,200 patients in total. Such practices unjustly inflate prices for customers and leave businesses at a disadvantage.
While Ofgem has introduced legislation for greater transparency in broker fees for very small businesses (micro-businesses) under Supplier Licence Conditions, the signatories contend that larger firms and organisations have been neglected.
The letter states: “We do not agree that larger businesses are able to look after their own interests, that just because this is a long-standing arrangement that it should continue, or that Ofgem is best placed looking at issues affecting microbusinesses only.”
Andrew Goodacre, CEO of BIRA, said: “It is vital for all businesses to have transparency with their energy bills and any other costs associated with the supply of energy. The recent significant increases in the cost of energy have made this even more important.”
The joint call for Ofgem to take action comes as businesses across industries face soaring inflation and reduced profits. By demanding fee disclosure for all firms, the associations hope to bring about pre-contract broker cost transparency to all business sectors, not just the micro-business sector.
Muntazir Dipoti, The Fed’s National President, added: “Independent convenience retailers are the fabric of society and play a critical role in their communities, but with the cost of doing business soaring, many Fed members are struggling to stay in business.
“It is, therefore, critical that Ofgem takes action against these hidden charges to prevent even more retailers being left severely out of pocket.”