News - Construction News

Drainage products subject to illegal cartel

Two construction firms have admitted breaking competition law by taking part in price fixing for drainage products.

The CMA has provisionally found that three drainage product manufacturers have broken competition law by co-ordinating prices for customers and sharing the market, with two of the businesses – Derbyshire-based Stanton Bonna Concrete Ltd and Somerset-based CPM Group Ltd – admitting the charges. The third company, FP McCann Ltd, headquartered in Northern Ireland, is also under investigation and has not made any admissions.

In a ‘statement of objections’ the CMA provisionally finds that the companies held regular secret meetings to set up and operate an illegal cartel, running from 2006 and continuing for almost seven years. 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.

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.

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

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 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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