British Gas's Goldfish angers watchdog

Click to follow
The Independent Online
British Gas could be heading for another confrontation with the industry regulator, Clare Spottiswoode, this time over this week's high-profile launch of "Goldfish", the company's venture into the credit card business.

Ms Spottiswoode is understood to be angry that she was not fully consulted about the group's decision to enter the financial services market.

Last night Ofgas confirmed that it had requested more information about Goldfish from British Gas and would then look at whether any action would be appropriate.

"It would have been nice to have been made aware about this earlier," an Ofgas spokesman said.

He said that Goldfish, which gives British Gas customers 1p off their gas bills for every pound they spend using the card, could raise potential competition issues.

If the card is deemed by Ofgas to be anti-competitive, the regulator could intervene under fair trading laws.

Executives see the card as an important step towards diversifying British Gas into lucrative new areas as its prepares to face full nationwide competition in the residential gas market, due in 1998.

The company is expected to lose a considerable chunk of its share of the market to rival gas suppliers.

If Goldfish is successful, other financial services products are planned, including a form of insurance which could guarantee to pay utilities bills.

The joint venture with HFC Bank, intended to capture a substantial share of the plastic card market, was announced last week with a pounds 10m television advertising campaign.

Mike Alexander, managing director of British Gas Trading, the gas supply division, had argued Goldfish was "the first implementation of our strategy to bring additional benefits to our customers and added value to our shareholders".

Yesterday, the head of one independent gas company, which aims to compete with British Gas for residential customers, claimed the card would be used to cherry-pick consumers who were the best credit risks.

A spokesman for British Gas said that the company believed Goldfish did not raise any issues which involved Ofgas.

"We have made them aware of it as a courtesy as much as anything else.

"It is in a market which is not regulated by Ofgas, so there is no need for the regulator to get excited about it," he explained.