Construction supply cartel fined £15m for price fixing

Two suppliers to some of Britain’s biggest building firms have been fined £15 million by the UK competition watchdog for price fixing.

The Competition and Markets Authority (CMA) said it had fined Vp more than £11.2 million and MGF (Trench Construction Systems) £3.8 million after an investigation found they colluded over prices for nearly two years.

The UK firms supply excavation groundworks products to some of the nation’s largest construction companies for projects such as housing developments, roadworks, railway line works and water pipe upgrades.

A third groundworks company, Mabey Hire, took part in the collusion for five months but has not been fined as the firm brought the illegal activity to the CMA’s attention and has co-operated with the investigation.

It is the CMA’s fourth fine for price fixing in the construction industry in two years.

Michael Grenfell, executive director of enforcement at the CMA, said: “Today’s announcement shows that the CMA continues to crack down on illegal cartel behaviour and protect consumers.

“The CMA will not tolerate illegal conduct which weakens competition and keeps prices up at the expense of consumers.

“It is essential that the sector, which is crucial to the success of our country’s economy, can benefit from a competitive marketplace to deliver value, innovation and quality.”

The CMA found Vp and MGF shared confidential information on future pricing and commercial strategy.

They also co-ordinated commercial activities to reduce uncertainty, including monitoring each other’s prices and challenging quotes they deemed too low.

Groundworks products are used to protect excavations – such as those made for building foundations or laying pipes – from collapse and are crucial for safe construction work.

It comes after a spate of recent cartel investigations in the building sector, with the CMA fining office fitting companies, concrete pipe firms and rolled roofing lead businesses in the past two years.