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Thu April 25 2019

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Mabey blows the whistle on groundworks cartel

9 Apr The Competition & Markets Authority (CMA) has accused three major suppliers of groundworks propping and shoring equipment of running a cartel, to the detriment of customers in the construction industry.

Groundforce, MGF and Mabey are in the frame
Groundforce, MGF and Mabey are in the frame

The CMA has provisionally found that the three companies have broken competition law.

The three under investigation are:  MGF (Trench Construction Systems) Ltd, Vp plc (specifically its Groundforce division) and Mabey Hire Ltd.

The CMA has provisionally found that the trio formed a cartel to reduce competition and keep prices up. This involved sharing confidential information on pricing and commercial strategy and coordinating their commercial activities. In a statement of objections issued today the CMA says that Vp and MGF operated the cartel for periods totalling nearly two years and Mabey took part for a single period of five months.

The investigation began in February 2017 after Mabey blew the whistle and informed the CMA. Mabey has confessed its role and will not be fined in accordance with the CMA's leniency programme – provided that it continues to cooperate with the CMA's investigation.

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Michael Grenfell, the CMA's 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."

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.

Vp plc issued a statement saying: “Vp is reviewing these provisional findings and will continue to cooperate fully with the CMA.  The group will make further announcements as appropriate.”

MPU

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