Does Every Little Supermarket Price Guarantee Help?

November 22, 2013

(by Morten Hviid) Last week, Asda’s marketing chief was reported as saying: “It is strange to me that our competitors are touting how much they match prices and are working towards parity. I find it almost anti-competitive that large competitors are talking about and proud to be matching each other’s prices. We are the only ones standing up and saying we’ll be 10 per cent cheaper” (Marketing Week, 15 November).  I have previously pointed out the potential anti-competitive effects of price guarantees, so it is unsurprising that I agree with him on the first point.  I will spell out one overlooked implication of the guarantee offered by Sainsbury’s and partially copied by Tesco below.  However, he is a bit too quick to absolve Asda’s price guarantee from potential anti-competitive blame. Read the rest of this entry »


A Simple Way to Boost Competition in the Energy Market

November 8, 2013

(by Andreas Stephan) The latest round of increases in energy prices has sparked an angry debate about how well competition is working in the UK market. Energy companies claim increases reflect rising wholesale prices and government levies, while politicians are making allegations of collusion. A long term view of how to make the energy market more competitive for consumers has been drowned out by political point scoring. Yet there may be a simple way of jump starting greater competitive pressures against the relentless price rises. Read the rest of this entry »


The Meaning of ‘Relevant Customer Benefits’ in the Context of Health Care: Monitor’s Advice and the Competition Commission’s Response

October 28, 2013

(by Mary Guy)[1] On 17 October, the Competition Commission (CC) blocked the proposed merger between Poole Hospital NHS Foundation Trust and The Royal Bournemouth and Christchurch Hospitals NHS Foundation Trust (hereafter “the Dorset FT merger”), the first to be assessed under the regime for Foundation Trusts (FTs) established by the Health and Social Care Act 2012 (HSCA 2012). This new regime sees Monitor providing advice regarding “relevant customer benefits” to the OFT, which – along with the CC – has exclusive competence to determine mergers between NHS FTs. The case suggests that a higher standard of ‘relevant customer benefits’ is applied in the context of mergers in health care. Read the rest of this entry »


Cameron’s Plans for Energy Combine the Good, the Bad and the Ugly

October 24, 2013

(by Catherine Waddams) Yesterday the Prime Minister announced two new measures as a response to the latest increases in energy prices. He promised an annual review of competition in the market and to “roll back some of the green regulations and charges that are pushing up bills”. While an enquiry by competition authorities should be welcomed, the proposed measures also raise some serious concerns. Read the rest of this entry »


Could Politicians Be Driving Up Energy Prices?

October 11, 2013

(by Andreas Stephan) We are once again seeing the familiar picture of one energy company announcing a significant price increase, no doubt soon to be followed by other major players in the industry. SSE is to raise gas and electricity prices by 8.2%, a figure that is three times the current rate of inflation and comes at a time when UK households are continuing to endure declining income in real terms. My colleagues, Catherine Waddams and Chris Hanretty have recently written on this blog about proposals by the Labour party to cap prices and abolish the regulator. However, there is also a possibility that statements made by politicians, intended to reduce prices, may actually be having the opposite effect. Read the rest of this entry »


Labour’s proposal to abolish Ofgem: if you don’t like the answer, change the regulator?

September 25, 2013

(by Chris Hanretty) At its party conference this week the Labour party offered starkly differing views on the value of independent authorities. On Monday, Ed Balls called for the (independent) Office of Budgetary Responsibility to audit the costings of measures in Labour’s election manifesto. On Tuesday, Ed Miliband called for (independent) energy market regulator Ofgem to be abolished and replaced by a new energy regulator with power to set retail prices.

It’s not hard to see some tension between these two proposals. Suppose that in 2018 the OBR were to issue a negative verdict on the economic plans of a future Labour government. Would we see calls to abolish the OBR and replace it with another authority capable of adopting a broader view? That’s unlikely: the whole value of the OBR depends on it operating without regard to interference like this. Read the rest of this entry »


Price Regulation is Not the Solution to Unaffordable Energy Prices

September 25, 2013

(by Catherine Waddams)  At the Labour party conference, Ed Miliband said he would freeze energy prices until 2017.  Miliband’s frozen energy prices might lead to frozen homes as well.  Interventions in energy markets do not have a happy history, either in California or the UK, and those who remember the public sector price freezes of the Wilson and Heath governments in the nineteen sixties and seventies may also recall the subsequent underinvestment, poor quality and shortages. Privatisation and independent regulation were seen as a solution to those problems, but energy markets in particular have proved very controversial. This isn’t the first political intervention. Read the rest of this entry »


Follow

Get every new post delivered to your Inbox.

Join 486 other followers