A PYMNTS Company

New Zealand: Energy watchdog looks to give small players a boost

 |  July 22, 2014

New Zealand’s energy watchdog is looking for ways to give smaller companies a competitive edge against the largest electricity firms with new rule changes, say reports.

The Electricity Authority has drafted new rules that would place restrictions on major conglomerates’ practices of winning back customers that have left the company for rival services. According to reports, up to 10 percent of customers that switched their energy providers in 2013 were successfully won back by their initial energy company through incentives and special offers.

According to the Electricity Authority, the practice is harming competition and making it difficult for new, smaller competitors to build a customer base.

Further, authorities found, customer acquisition campaign costs have risen as a result of the practice.

Small competitor Pulse Utilities, in particular, was found to have lost up to 20 percent of its customer base to these win-back practices.

”For small and new entrant retailers, saves and early win-backs present a barrier to entry and expansion,” the regulator said during its announcement of the new rule proposals that would curb the practices.

Full content: NZCity

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.