Three major UK construction suppliers accused of “cartel” behaviour to raise prices

Acting on a tip-off, UK government department the Competition and Markets Authority (CMA) is investigating three groundworks products suppliers for alleged "cartel" behaviour intended to reduce competition and keep prices high.

The firms are M.G.F. Trench Construction Systems, Vp Plc, and Mabey Hire Ltd, which acted as whistleblower of the alleged breaches of law.

The CMA said it provisionally found that the firms shared private pricing and strategy information and coordinated their commercial activities.

Mabey Hire raised concerns to the CMA, citing on its website: "(We) proactively raised concerns with the CMA about potential anti-competitive behaviour, and gave its full support and co-operation to their investigation.

"Unfair competition is not conducive to a healthy market place and every company faces a major challenge to ensure every employee is acting appropriately."

The CMA said Mabey’s confession meant it would not be fined – as long as it continues to co-operate with the investigation.

The CMA found that Vp and M.G.F. operated a cartel for almost two years in total, while Mabey were involved for "a single period of 5 months".

The CMA alleges that Vp and M.G.F. were involved in illegal activity during between three periods:

  • 23 September and 4 October 2011,
  • 14 February to 24 November 2014
  • 12 November 2015 to 28 November 2016

Mabey was involved between 14 February to 16 July 2014.

Michael Grenfell, CMA executive director for enforcement, said: "These are three major suppliers of equipment used to keep construction workers safe.

"It is crucial that builders and their customers benefit from genuinely competitive pricing for this essential equipment.

"Everyone must follow competition law, which protects customers from being exploited and paying more, as well as encouraging companies to compete for business in other ways – through innovation, quality and service.

"The CMA uses its powers vigorously and robustly to root out illegal cartels."

If found guilty, Vp and M.G.F. could be fined up to 10% of annual group turnover.

Image courtesy of Pattanaphong Khuankaew/Dreamstime

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