IB 02/13 Ofwat accepts commitments from Severn Trent plc

Following consultation, Ofwat has confirmed that it has accepted binding commitments from Severn Trent plc. This is the first time Ofwat has accepted commitments under the Competition Act 1998.

In August, Ofwat consulted on its intention to accept binding commitments from Severn Trent plc. These included a commitment to divest Severn Trent Laboratories and were offered to address concerns raised by Ofwat following a complaint under the Competition Act. Severn Trent Laboratories provided water analysis services to Severn Trent Water and other companies.

The complainant, ALcontrol UK Ltd, alleged that Severn Trent Laboratories had been able to win contracts by pricing below cost, which was enabled by the structural links between Severn Trent Water Limited and Severn Trent Laboratories Limited.

Having taken account of the representations received, Ofwat has concluded that Severn Trent plc’s commitments fully address its competition concerns. And as a result the investigation is now closed.

Notes to Editors:

 

  1. Ofwat (The Water Services Regulation Authority) is the economic regulator of the water and sewerage sectors in England and Wales. It exercises its powers in a way that it judges will protect the interests of consumers, promote value and safeguard future water and sewerage services by allowing efficient companies to carry out their functions properly, and finance them.
  2. The complainant’s allegations were of anti-competitive pricing practices, which are contrary to the Chapter II Prohibition (Abuse of a dominant position) of the Competition Act 1998.
  3. Ofwat’s decision to accept binding commitments does not amount to or imply that Ofwat has reached any conclusions as to the legality or otherwise of the conduct of Severn Trent and its subsidiaries under investigation.
  4. Statutory water undertakers (in England and Wales) and water providers (in Scotland and Northern Ireland) are required by law to meet specified requirements in respect of the collection and analysis of samples of the water they supply to ensure that drinking water quality meets required standards. This includes a requirement to have the samples analysed by a laboratory which has a system of quality control that is subjected to independent oversight.
  5. Media enquiries to Ofwat Press Office: Benedict Fisher or Harbinder Babra on 0121 644 7642/7616