Two Construction Firms Admit to Illegal Cartel

THREE drainage product manufacturers broke competition law by coordinating prices for customers and sharing the market, according to the Competition and Markets Authority (CMA). 

Two of the businesses – Derbyshire-based Stanton Bonna Concrete Ltd and Somerset-based CPM Group Ltd – have admitted breaking competition law by taking part in a cartel, which started in 2006 and continued for almost seven years. A third company, FP McCann Ltd, headquartered in Northern Ireland, is also under investigation and has not made any admissions.

In a ‘statement of objections’, the CMA provisionally found that the companies held regular secret meetings to set up and operate an illegal cartel. Its aim was to fix or coordinate prices and share out the market for certain pre-cast concrete drainage products in Great Britain, with the intention of increasing prices and reducing competition.

Throughout the period of the alleged cartel activity, the companies were leading players, accounting for over half of the market. From 2010 onwards, they held over 90% of this market.

Michael Grenfell, Executive Director of Enforcement, said, “Cartels damage competition and lead to less choice, less innovation and increased prices for customers.

“We’ve provisionally found that these three firms secretly shared out the market and colluded on prices for construction products used in many building projects across Great Britain.”

Firms Admit to Illegal Cartel

As part of a settlement process, Stanton Bonna and CPM have admitted to participating in the alleged cartel and have agreed to pay fines, which will be determined at the end of the CMA’s investigation. FPM is not part of this settlement and, at this stage, no assumption can be made that it has broken the law.

Examples of the CMA’s action against cartels include: fining two of the main suppliers of bagged charcoal and coal for households in the UK over £3.4 million for taking part in a market sharing cartel and fining water tank firms over £2.6 million after they formed a cartel agreeing to fix the price of certain tanks, divide up customers and rig bids for contracts.

The CMA also runs a ‘Stop Cartels’ campaign, which aims to educate businesses about which practices are illegal and urges people to come forward if they suspect a business has taken part in cartel behaviour, such as fixing prices or rigging contracts.

>> Read more about construction cartels in the news