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Two construction firms admit cartel activity

13 December 2018 | By Neil Gerrard

Two construction companies have admitted breaking competition law by taking part in a cartel that lasted for almost seven years, while a third is under investigation.

The Competition and Markets Authority (CMA) today issued a ‘statement of objections’ that provisionally finds that the drainage product manufacturers - Derbyshire-based Stanton Bonna Concrete and Somerset-based CPM Group – held regular secret meetings to operate the cartel from 2006.

FP McCann, based in Northern Ireland, is also under investigation but has not made any admissions.

Throughout the period of the alleged cartel activity, the companies were leading players, accounting for over half of the market, the CMA said. From 2010 onwards, they held over 90% of this market.

The CMA said the aim of the cartel was to fix or coordinate prices and share out the market for certain precast concrete drainage products in Great Britain, “with the intention of increasing prices and reducing competition”.

These products are used in large infrastructure projects across Great Britain, including water management, roads and railways. Typical customers include engineering and construction companies; utilities providers; and local and national government.

Michael Grenfell, executive 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 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.”

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

Because Stanton Bonna and CPM group have admitted they breached competition law, the CMA is likely to impose a reduced penalty on the businesses thanks to savings made through a streamlined investigation process.

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