December 20, 2018

Drainage suppliers provisionally found guilty of operating a cartel

News Article

Two drainage product manufacturers, who were accused of price fixing, have admitted breaking competition laws following an investigation by the Competition and Markets Authority (CMA.)

Stanton Bonna Concrete, based in Derbyshire and CPM Group based in Somerset both admitted that for around seven years they had worked collaboratively.

A third company, Northern Ireland-based FP McCann, has also come under investigation but to date has denied any wrongdoing.

The CMA has provisionally found that all three companies held regular clandestine meetings in order to fix or coordinate prices for pre-cast concrete drainage products in the UK.

The CMA has calculated that whilst the alleged cartel activity was active, the three companies controlled 90 per cent of the market.

Michael Grenfell, CMA’s Director of Enforcement 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.”

Stanton Bonna and CPM have both admitted their part in the alleged cartel and fines, which could potentially total millions of pounds, will be determined following the conclusion of the CMA’s investigation. FP McCann continues to deny all accusations of price fixing and are not party to any settlement proceedings.

In 2017, Stanton Bonna’s former Chief Executive, Barry Cooper, was handed a two-year suspended prison sentence after he pleaded guilty to a criminal cartel offence. The CMA concluded there was insufficient evidence to charge any other individuals but continued its civil investigation, as to whether the companies had infringed the Competition Act 1998.

Adam Davis, a Partner with Palmers who specialises in construction disputes and litigation, said: “This case illustrates the fact that the CMA is determined to create a level playing field for suppliers operating in the construction and engineering sectors.

“Price-fixing is illegal and any company or individual found guilty of such an offence faces significant fines and a potential custodial sentence.

“Anyone operating in the construction or engineering industry, who suspects underhanded, illegal business practices, should seek specialist legal advice.”

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