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What the collapse of Tomato Energy tells us about the energy market
The collapse of Tomato Energy has left thousands of customers being moved to new suppliers under Ofgem’s safety-net process. It’s another reminder that the problems in the UK energy market run deeper than Over the past few years, several smaller suppliers have gone bust. The pattern is familiar: new entrants arrive offering eye-catching prices, win customers quickly, but fail to survive when wholesale price rise. Their margins vanish, cash flow collapses and customer service suffers until the company folds. Customers are then transferred to a “Supplier of Last Resort”, often facing higher tariffs and weeks of billing confusion. The Cost For Businesses For business owners, these collapses any single company. A Familiar Pattern
create more than inconvenience. Billing disputes, credit uncertainty and unexpected costs all take time and money to resolve. More importantly, every failure erodes confidence in the energy market, making people wary of switching and damaging genuine competition A Market Built on Short-Term Thinking The deeper issue is structural. The market is still rewardaring low prices rather than long-term value and sustainability. Energy supply isn’t just about unit rates, it depends on risk management, accurate billing and reliable support. Until pricing models and regulation reflect that, we’ll keep seeing the same cycle repeat. What Businesses Can Do to Protect Themselves When a supplier collapses, most of the
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