White labelling is becoming a common practice in retail energy, where a licensee enters into an arrangement with a third party to sell energy under that third party’s branding. While this arrangement may confer on the non-licensed entity significant influence and control over the sale of electricity, it is important to ensure that the energy retail licensee is undertaking the activity of selling energy and that the non-licensed entity does not engage in activities for which they are not licensed.
In Victoria, the Electricity Industry Act 2000 and Gas Industry Act 2001 require that any white-label arrangement must not result in the sale of energy without a licence or an exemption. To ensure compliance with these obligations, it is important to have detailed contractual arrangement that clearly stipulates the responsibilities of licenced and non-licenced entities.
Consumers of energy offered under a white-label contract are entitled to receive the same protections under the code as customers of retailers that sell under their own branding. Energy sellers must ensure that they comply with all of the applicable regulatory obligations including those relating to:
- explicit informed consent;
- best offer notifications; and
- protections for customers experiencing vulnerability such as family violence, life support, and hardship.
Even though a white-label entity may rely on the systems and processes of a licenced energy retailer to ensure compliance with the above obligations, a white-label entity must have their own processes and governance measures in place to ensure they have sufficient oversight to monitor compliance of the licenced entity.
Both entities must have robust processes in place to ensure compliance and that any non-compliances are appropriately and in a timely manner dealt with. The purpose of doing this is two-fold:
- to ensure your customers are treated fairly therefore not negatively affecting the white-label brand; and
- to ensure that the responsibilities of the parties are clear and are carried out in a manner that is consistent with the contractual agreement.
White-labelling arrangements, which may be accompanied by complex divisions of responsibility, place customers’ welfare at risk if those engaged in a white-labelling arrangement do not take sufficient care to ensure a retailer is meeting its obligations. It is therefore important for all parties involved in a white-labelling arrangement to ensure that all regulatory obligations are met.