Competition & Markets Authority
Two construction firms admit to illegal cartel
The CMA has provisionally found that 3 drainage product manufacturers broke competition law by co-ordinating prices for customers and sharing the market.
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 7 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’ issued yesterday, the CMA provisionally finds 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.
These products are used in large infrastructure projects across Great Britain, including water management, roads and railways. Typical customers include engineering and construction companies; utilities providers; and local and national government.
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, yesterday 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.
The CMA does not tolerate such practices and will use our enforcement tools to crack down on those it believes are taking part in illegal cartels.
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 overall investigation. FPM is not part of this settlement and, at this stage, no assumption can be made that it has broken the law.
Some recent examples of the CMA’s action against cartels include: fining 2 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.
Notes to editors
- The statement of objections is addressed to the following parties, which the CMA provisionally considers were directly involved in the alleged infringements or are liable as parent companies of the undertakings directly involved: (a) Stanton Bonna Concrete Limited and its parent companies Bonna Sabla SA, Consolis Finance SAS, Consolis SAS, and Consolis Group SAS (b) CPM Group Limited (c) FP McCann Limited.
- A statement of objections gives parties notice of a proposed infringement decision under the Competition Act 1998 and Article 101 of the TFEU. It is a provisional decision only and does not necessarily lead to an infringement decision.
- A party under investigation may enter into settlement if it is prepared to admit that it has breached competition law and is willing to agree to a streamlined administrative procedure for the remainder of the investigation. In return, the CMA imposes a reduced penalty on the business where settlement would achieve clear efficiencies, resulting in the earlier adoption of any infringement decision and other resource savings. Stanton Bonna and CPM have entered into settlement, and admitted that they have infringed the law.
- The CMA continues to investigate the conduct of a further manufacturer, FP McCann Limited, which is not a party to the settlement announced yesterday. No assumption should be made that FP McCann Limited has infringed the law.
- The CMA also conducted a related criminal investigation into whether individuals had committed an offence under section 188 of the Enterprise Act 2002, the criminal cartel offence. These proceedings have concluded, with one conviction following a guilty plea.
- Anyone who has information about a cartel is encouraged to call the CMA cartels hotline on 020 3738 6888 or email firstname.lastname@example.org.
- Enquiries should be directed to the CMA’s press team: email@example.com, or 020 3738 6460.
- More information on this investigation can be found on the supply of precast concrete drainage products case page.
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