Thames leads wholesalers in offering £1m credit discount to retailers
Thames Water has won praise from new entrant The Water Retail Company (TWRC) for becoming the first wholesaler to offer substantial help to retailers struggling with credit terms in the market.
The week before Christmas, Thames announced it would waive collateral cover on the first £1m of wholesale turnover for any retailer operating in its region. The discount means retailers do not have to provide credit support for their first £1m of customer income, providing the opportunity for them to grow to the point where they can secure credit on better terms.
TWRC, which has been leading a challenge to the credit terms in place on day one of live trading on behalf of the new retailer community for many months, said the Thames initiative “could help solve the major barrier to entry for new entrants”. It explained those without a credit history have been crippled by the market’s “extremely onerous” credit terms, which for new entrants boil down to either pre-pay or posting a 50-day cash deposit.
Mark Holloway, head of wholesale market services at Thames Water, said: “By taking this step we’re promoting market entry, in particular for smaller retailers. The feedback we’ve received has been positive and we hope our current and future retailers see this as part of our continued commitment to them.”
TWRC chief executive Rupert Redesdale said: “Thames have understood the problem that new retailers face, the credit support options are a major barrier to entry and the ability to win new business. Thames’s innovative solution will boost the market and means that there will be a lot more competition which will be good for water customers.”
For more details, see interview with TWRC in January’s THE WATER REPORT. NOT A SUBSCRIBER? SIGN UP