Lincs NHS supplier slammed by competition chiefs
The Competition and Markets Authority (CMA) has provisionally concluded that a Skegness-based supplier of cleanroom laundry services has broken competition law through a market-sharing agreement.
The suppliers involved, which operated a joint venture which saw them both provide services and products under the Micronclean brand are Micronclean based in Skegness, formerly known as Fenland Laundries (Fenland); and Berendsen Cleanroom Services, formerly known as Micronclean (Newbury) (Berendsen Newbury).
The CMA has found that, from May 2012 to February 2016, the firms had a market-sharing arrangement under which they divided up customers by geographical territory or customer type.
The parties had been trading under the ‘Micronclean’ name since the 1980s, by virtue of the longstanding joint venture. The market-sharing arrangement alleged by the CMA arose from trademark licence agreements which operated from 30 May 2012 until they were terminated (when the related joint venture was disbanded) on 3 February 2016.
The CMA provisionally finds that under the market-sharing arrangement, Fenland served customers in an area north of a line broadly between London and Anglesey, whilst Berendsen Newbury served customers located south of that line. Certain other customers were allegedly divided up between the parties based on the nature of their business or the product or service they required. The alleged arrangement prevented each company from supplying customers which were located outside the company’s designated area or certain types of customers.
The CMA provisionally concludes that the arrangement – which came to the CMA’s attention in the context of its merger control function – restricted competition between the 2 suppliers.
Ann Pope, CMA senior director of antitrust enforcement, said: “However they arise, market-sharing agreements are a serious breach of competition law, which usually deny customers the benefits that arise from competition – such as lower prices, greater choice and innovation and improved service. We allege that even though these two companies could have supplied all relevant types of customer, including customers outside each party’s designated area, they instead agreed not to compete.
“It’s essential that companies regularly consider the competition law implications of all their commercial arrangements including when entering or buying into joint ventures. They should take full and prompt action when the risk of breaking competition law is identified.
“These are provisional findings only and no conclusion can be drawn at this stage that there has been a breach of competition law. We will carefully consider any representations from the parties before deciding whether the law has been broken.”
Cleanroom laundry services are supplied to customers with operations in sterile environments, including pharmaceutical manufacturers, NHS pharmacies and manufacturers of semi-conductors, micro-electronics, medical devices and precision engineering. Such customers wear specialist garments which need to be laundered in way that prevents particulates contaminating their working environment.
