Construction suppliers accused of colluding to keep prices up
The Competition and Markets Authority (CMA) has provisionally found that three major suppliers to the construction industry – including Harrogate-headquartered Vp -broke competition law.
The CMA is investigating Vp plc, M.G.F. (Trench Construction Systems) (MGF), and Mabey Hire (Mabey) – three major suppliers of groundworks products to the construction industry.
Provisional findings show that businesses formed a cartel to reduce competition and keep prices up. The CMA said: “This involved sharing confidential information on pricing and commercial strategy and coordinating their commercial activities.”
In a Statement of Objections issued today the CMA states its provisional view that Vp and MGF operated the cartel for periods totaling nearly two years and Mabey took part for a single period of five months.
Groundworks products (including braces, props and sheeting) are used to protect excavations – such as those made for foundations or for laying pipes – from collapse and are important for keeping construction sites safe. The three companies supply these products for a range of major housing and road developments, railway line works and water pipe upgrades.
The companies’ behaviour came to light after one of the firms blew the whistle and brought information about the conduct to the CMA’s attention. Mabey has confessed its role and will not be fined in accordance with the CMA’s leniency programme – provided it continues to cooperate with the CMA’s investigation.
Michael Grenfell, the CMA’s Executive Director for Enforcement, said: “These are 3 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.”
The CMA’s findings are, at this stage in its investigation, provisional and do not necessarily lead to a decision that the companies have breached competition law. The firms now have the opportunity to consider the detail of the CMA’s provisional findings and respond to it. The CMA will carefully consider any representations made before issuing its final findings as to whether the law has been broken.
