Daily Telegraph: Message in a gas bottle: “The commission wants the suppliers in this £120m industry to be more customer-friendly with its contracts, switching processes and information. It all seems fair enough, and if the suppliers disagree, the commission has ways of changing their minds…”: Wednesday 24 August 2005

City comment

Edited by Neil Collins

(Filed: 24/08/2005)

High price of tank gas is due to 'weak competition'

You probably never wondered, as you struggled to interpret those incomprehensible instructions for changing the gas cylinder on the caravan, boat or out-of-the-way cottage cooker, whether there was an alternative to wherever-it-was they sold the refills.

You just paid what the man asked, and if Shell gas was cheaper than Calor, then tough, because you knew (or would quickly find out) that you couldn't attach its bottle to the Calor gas tap.

So you'll be pleased to hear that the authorities have been worrying about this on your behalf. In July last year the Office of Fair Trading sent the problem to the Competition Commission, and yesterday it came up with some preliminary findings. Just 14 months and an Emerging Thinking (sic) document later, they have noticed that each valve on the tap is a proprietary design and will fit only that supplier's gas bottles.

This is, of course, anti-competitive. You do not need to be a conspiracy theorist to deduce that it's also deliberate. Most users have better things to do than to find an engineer to change the valve (or even, for those with serious fixed tanks, the entire set-up) so they just pay.

It's worth noting, in passing, that had the suppliers all got together and agreed on a standard design, the competition authorities might have had a go at them for collusion, so you can hardly blame them.

It's easy to describe the problem, and rather more difficult to fix. It does seem silly that those big fixed tanks are usually removed when the customer switches supplier, replaced by an almost identical model, but transferring ownership of existing tanks might raise safety issues, since they are not only shaped like bombs.

The commission wants the suppliers in this £120m industry to be more customer-friendly with its contracts, switching processes and information. It all seems fair enough, and if the suppliers disagree, the commission has ways of changing their minds…

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2005/08/24/ccom24.xml

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