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The (in) famous Five

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The Big Six energy retailers are set to shrink to five. The Competitions and Markets Authority has given the green light to a merger between Npower and SSE.

This marks a distinct U-turn on its hostile view just five months ago. Then the official line was that consolidation “would substantially cut competition and drive up household bills,.” So what  has changed?

One logical conclusion is that lobbying by the firms won the day. But a more sophisticated  interpretation is that this is simply an acknowledgment by the Competitions and Markets Authority that the big suppliers are already losing hundreds of thousands more customers to dozens of keenly priced start-up rivals. 

Npower and SSE are pitching their merger as tremendously good news for householders, arguing that the new firm – rivalling British Gas in size-  will somehow be much more efficient and agile, delivering a price cutting bonanza. 

This is drivel. This  merger is an existential reaction to a marketplace that is now a hostile environment for the Big Six. Or even for the Big Five.  And likely to get worse  for them when the Government’s latest interventionist gimmick,  of new price controls, kicks in early December. I suspect the new company, to be known colloquially as NSS in homage to 1930s Germany,  has even bigger challenges ahead.

Mohammed Kurdi

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