Unfair funfair for fairgoers! CMA targets Funfair business!

First published by Admin on January 05, 2017 in the following categories: Latest and tagged with cma

The Competition and Markets Authority (CMA) has recently issued a statement of objections to the Showmen’s Guild of Great Britain, a trade association for the travelling funfair business, for its alleged anti-competitive practices.

The Guild’s 127-year-old carnival rules have allegedly protected their own Guild showmen from competition and reduced the chances for potential new attractions to join fairs. This could potentially limit free choice of millions of fairgoers as well as deprive them of access to improved rides and attractions. This could also hinder the fairgoers value for money as a lack of competition can mean a hike in prices.

The rules are thought to restrict members who make up 90% of the travelling fairs sector in the U.K. The CMA estimates the industry to be worth a whopping £100 million a year. These rules have potentially affected members from competing with one another to organise or attend fairs, and may also prohibit members from starting new fairs in competition with existing fairs.

Back in December 2015, an initial investigation was opened to gather information, and consequently for the CMA to review and analyse that information. The competition watchdog then made a decision to proceed with the investigation.

There must have been substantial grounds of suspicious anti-competitive behaviour as the CMA has now written a statement of objections to the funfair body, which is a formal step in investigations into suspected violations of competition laws. The competition authority notifies the parties concerned that objections are raised against them.

Negative effect on fairgoers

Ann Pope, a senior director at CMA, said:

“…these allegations concern the use of restrictive rules which could limit competition between funfairs and effectively prevent non-guild members from being able to compete.”

Ms Pope highlights the fact that if new fairs can’t take place, the fairgoers are the ones who are losing out!

Suspected anti-competitive behaviour is substantiated by the fact that fairs are hosted on the request of local authorities, who then ask organisers to arrange the supply of attractions. The organisers tend to be Guild members who then recruit other Guild members to provide the rides.

It seems like a Guild-only affair…

The CMA also notes that, in cases where local authorities try to alter or improve a fairground attraction without the consent of the Guild, its members can boycott the whole fair as a result of the rules, which actually happened in Newcastle 2013. The 2013 boycott meant that the annual Hoppings Fair was cancelled, which led to around half a million fairgoers missing out on their annual fun.

Provisional findings

The CMA’s findings are only provisional, and will likely warrant further investigation before they decide whether there has been a potential infringement of competition laws. The investigation is currently under Chapter I of the Competition Act (CA), which bans an agreement made between two or more businesses that can have an effect of preventing, restricting, or distorting competition within the U.K., which consequently may affect trade within the U.K.

If the CMA finds that the Showmen’s Guild has breached this prohibition, they could impose fines of up to 10 per cent of global annual turnover.