Cartel busters fine ground shoring companies £15m

Grant Prior 12 months ago
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Two major UK groundworks products suppliers have been fined £15m for illegally colluding to reduce competition and keep prices up.

A Competition and Markets Authority (CMA) investigation found that Vp plc and M.G.F. (Trench Construction Systems) Ltd shared confidential information on future pricing and commercial strategy.

They also coordinated their commercial activities to reduce uncertainty, including monitoring each other’s prices and challenging quotes they deemed too low.

Vp and MGF were fined £11.2m and £3.7m respectively for collusion over a period lasting nearly two years.

A third groundworks company, Mabey Hire Ltd, took part for a single period of five months.

Mabey has not been fined as it brought the illegal activity to the CMA’s attention and fully cooperated with the investigation, under the CMA’s Leniency Programme.

Vp and MGF confirmed they will be appealing against the decision.

Michael Grenfell, Executive Director of Enforcement at the CMA, said: “Today’s announcement shows that the CMA continues to crack down on illegal cartel behaviour and protect consumers.

“The CMA will not tolerate illegal conduct which weakens competition and keeps prices up at the expense of consumers.

“This is the fourth time in the last 2 years that the CMA has fined a cartel in the construction sector.

“It is essential that the sector, which is crucial to the success of our country’s economy, can benefit from a competitive marketplace to deliver value, innovation and quality.”

VP said: “Vp fundamentally disagrees with the conclusions of the CMA and based on the board’s current view of the information available it is our intention to appeal to the Competition Appeal Tribunal (CAT).

“Notwithstanding, the Group’s view of the merits of the CMA’s findings, Vp has always prided itself on conducting its business fairly and ethically.

“The board is committed to ensuring that our policies and procedures are adhered to by all Vp employees.”

MGF said: MGF has cooperated fully for almost four years in an investigation conducted by the Competition and Markets Authority (CMA), despite believing it to be fundamentally unsound having stemmed from misconceived allegations and a flawed investigative process.

“MGF is bitterly disappointed with the CMA’s recent decision and wholeheartedly disagrees with it.

“MGF believes the CMA has misunderstood the workings of its markets, including the legitimate and bona fide trading relations that exist between it and the other companies named in the investigation.

“The CMA has also chosen to disregard the large quantity of irrefutable evidence showing MGF’s strong and continuous competitive stance in its markets.

“It is an indisputable fact that MGF has steadily expanded and grown at the expense of its competitors during the time periods considered by the investigation. This alone is testament to MGF’s long-standing commitment to competition and its customers.

“MGF and its legal advisors are currently considering launching a formal challenge to the CMA’s decision in the Competition Appeal Tribunal (CAT), and consequently the Company is not able to comment any further on the matter at this time.”

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