Groundworks supplier investigation: the latest
First published by Author on June 06, 2019 in the following categories: Cartels Industry Price Fixing Price Hikes Pricing and tagged with cartels | cma | investigations | price fixing | pricing
There’s an ongoing groundworks supplier investigation being conducted by the Competition and Markets Authority (CMA), so here’s the latest.
The investigation surrounds suspicions of anti-competitive behaviour in the sector for the supply of groundworks products to the construction industry. The CMA’s investigation is looking into whether any of the key suppliers in the market are breaching important competition laws. If they are found to be acting unethically, they could face substantial fines.
The investigation has been going on for some time now, and a great deal of evidence has been collected and reviewed so far.
About the groundworks supplier investigation
The groundworks supplier investigation was launched by the CMA back in February 2017. In July 2017, the CMA decided there was enough evidence to proceed with the investigation, and information was gathered with a review planned for the following year. In March 2018, the CMA decided again to continue with the investigation.
Normally, the CMA will only allocate resources to investigations and continue with them where there are reasonable grounds of a finding. Although no final finding has been established as of yet, and no assumptions can be made, the CMA are committed to looking into the sector further.
The most recent update perhaps explains why.
Latest in the groundworks supplier investigation
In April 2019, the CMA issued a statement of objections in relation to the groundworks supplier investigation.
A provisional finding has been made against three companies who are alleged to have formed a cartel in order to keep prices high.
They are alleged to have:
- Shared commercially sensitive and confidential information;
- Coordinated their commercial strategies and activities.
This can artificially inflate prices and reduce the quality of service son offer. The winners are the suppliers, and the losers are the consumers.
In a healthy and competitive market, that should never be the case.
Who are the companies being investigated?
The firms involved in the groundworks supplier investigation are:
- G.F. (Trench Construction Systems) Ltd (MGF);
- Vp plc;
- Mabey Hire Ltd (Mabey).
It’s reported that MGF and Vp were allegedly operating a cartel for two years, with Mabey involved for a period five months. It was then Mabey who approached the CMA as a whistle-blower and confessed to engaging in the alleged anti-competitive behaviour. They continue to cooperate with the CMA and will likely avoid facing a fine for their role in bringing the alleged cartel behaviour to the CMA’s attention.
What’s next?
The findings are provisional, so this investigation is far from over. The companies alleged to have engaged in the cartel can now either dispute the provisional findings, or accept that they have broken the law (if they have).