Response to CMA’s Issues Statement for its Phase 2 consideration of the proposed merger between SSE Retail and npower

Two of the largest electricity and gas suppliers in Great Britain, SSE (Retail) and npower, have proposed a merger.  Because of the scale of the merger, the Competition and Markets Authority (CMA) is investigating whether it should be allowed to go ahead.

In our submission 312 KB , we suggested that the merger would be likely to lessen competition, but that this dilution is likely to be limited and may fall short of the substantial lessening of competition test that the CMA would look for before it would consider blocking it.  We suggested that several of the theories of harm put forward by the CMA were plausible, though hard to quantify. We expressed concern that small suppliers’ exemptions from policy costs were distorting competition. We also expressed concern that the desire to strip costs out of the merged business could impact on levels of customer service.