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Mon January 21 2019

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Pre-cast firms admit to illegal cartel

13 Dec 18 The Competition & Markets Authority (CMA) has provisionally found that three drainage product manufacturers broke competition law by fixing prices, dividing up the market between them and ripping off their construction industry customers.

Derbyshire-based Stanton Bonna Concrete and Somerset-based CPM Group  have admitted breaking competition law by collaborating in a cartel, which started in 2006 and continued for almost seven years.

A third company, FP McCann, headquartered in Northern Ireland, is also under investigation but has not made any admissions.

In a ‘statement of objections’ issued today, the CMA has provisionally found that the companies held regular secret meetings to set up and operate an illegal cartel. Its aim was to fix or coordinate prices and share out the market for certain pre-cast concrete drainage products in Great Britain, with the intention of increasing prices and reducing competition.

Throughout the period of the alleged cartel activity, the three companies together accounted for more than half of the market. From 2010 onwards, they held over 90% of the market.

CMA director of enforcement Michael Grenfell 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.”

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As part of a settlement process, Stanton Bonna and CPM have admitted to participating in the alleged cartel and have agreed to pay fines, which will be determined at the end of the CMA’s overall investigation.

FPM is not part of this settlement and, at this stage, no assumption can be made that it has broken the law.

On the basis of previous cases, Stanton Bonna and CPM should expect to be fined millions. Recent examples of the CMA’s action against cartels include two leading suppliers of bagged domestic charcoal and coal being fined £3.4m water tank fabricators being fined £2.6m for cartel activity.

The former chief executive of Stanton Bonna, Barry Cooper, was last year given a two-year suspended jail sentence having pleaded guilty to one count under section 188 of the Enterprise Act 2002, the criminal cartel offence. Cooper was arrested in 2013 at the start of the investigation begun by the CMA’s predecessor, the Office of Fair Trading.

The CMA continued the criminal investigation but in June 2017 decided that there was insufficient evidence to charge any other individuals. Its civil investigation continued, looking into whether the companies had infringed the Competition Act 1998.

MPU

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