Construction cartel busted by competition watchdog

The competition watchdog has found that three major suppliers to the construction industry formed a cartel to jack up prices in a breach of antitrust law.

The Competition and Markets Authority (CMA) said it provisionally found that MGF Trench Construction Systems, Vp and Mabey Hire “formed a cartel to reduce competition and keep prices up”.

The trio supply groundworks products to the construction industry and stand accused of sharing confidential information on pricing and commercial strategy, as well as co-ordinating their commercial activities.

In its findings, the CMA said that Vp and MGF operated the cartel for nearly two years and Mabey took part for a single period of five months.

The companies’ behaviour came to light after one of the firms blew the whistle and brought information about the conduct to the CMA’s attention.

Mabey has confessed its role and will not be fined, in accordance with the watchdog’s leniency programme, provided it continues to co-operate with the investigation.

Michael Grenfell, the CMA’s executive director for enforcement, said: “These are three major suppliers of equipment used to keep construction workers safe. It is crucial that builders and their customers benefit from genuinely competitive pricing for this essential equipment.

“Everyone must follow competition law, which protects customers from being exploited and paying more, as well as encouraging companies to compete for business in other ways – through innovation, quality and service.

“The CMA uses its powers vigorously and robustly to root out illegal cartels.”

Groundworks products such as braces, props and sheeting are used to protect excavations, such as those made for foundations or for laying pipes, from collapse and are important for keeping construction sites safe.

The three companies supply these products for a range of major housing and road developments, railway line works and water pipe upgrades.

Vp said it is reviewing the findings and will “continue to co-operate fully with the CMA”.

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