Energy Price Hikes - Again!

British Gas (or Centrica, to give them their true name) has just announced a 6% increase in energy prices. They have been followed by NPower, Scottish Hydro, Swalec and Southern Electric. The last three have said that their prices will increase by an average of 9% from Monday next week. 

This is Wikipedias definition of a cartel:

'A cartel is a formal agreement among competing firms. It is a formal organization where there is a small number of sellers and usually involve homogeneous products. Cartel members may agree on such matters as price fixing, total industry output, market shares, allocation of customers, allocation of territories, bid rigging, establishment of common sales agencies, and the division of profits or combination of these. The aim of such collusion (also called the cartel agreement) is to increase individual members' profits by reducing competition.'

This is the Office of Fair Trading (OFT) definition:

'The term 'cartel' is a catch-all that covers any of the following collusive arrangements between businesses:

• Directly or indirectly fixing prices between businesses - where two or more businesses agree to raise the price of their product or service instead of setting their prices independently of each other and competing in the market place. This is known as price fixing.
• Limiting or preventing supply or production between businesses - where two or more businesses agree to limit or prevent the supply or production of a product.
• Dividing up customers or prospective customers between businesses - where two or more businesses agree that they will not poach each other's customers and/or that business 1 will not compete with business 2 in area A if business 2 agrees to a similar arrangement for the benefit of business 1 in area B. This is known as market sharing.
• In response to a request by a third party to tender for a contract, a secret agreement between businesses that one or more of them will agree not to bid for the contract or one or more of them will put in an artificially high price for the contract to allow another business to win the contract - perhaps for a return of favour on another occasion when another contract is tendered. This is known as bid rigging.'

Cartels are illegal in the UK - so why aren't the Police and the Government doing something about this situation? The Office of Fair Trading offers up to £100,000 as a reward for information about cartels - perhaps if we all let them know about this, we could claim some of that reward? 

To inform the OFT about a cartel you can do the following:
If I have any information about cartels, who should I call?
To contact us you can call our cartels hotline on 0800 085 1664. You will immediately be put through to a voice mailbox. Please leave a message with your contact details and an investigator will try to respond to your call within two business days. Alternatively email: cartelshotline@oft.gsi.gov.uk.