The Office of Fair Trading’s drive to root out price cartels in the construction industry has had a boost after two West Midlands roofing contractors lost appeals against their convictions
The Competition Appeal Tribunal last week threw out challenges brought by the two roofing firms, Apex Asphalt and Paving Company and Richard W Price, against charges that they and seven others had agreed to fix prices by collusive tendering of repair, maintenance and improvement services.
The tribunal upheld the findings of the OFT hearing last March and the £35,922 fine imposed on Apex. It reduced the fine imposed on Richard W Price from £18,000 to £9000.
The decision will lend teeth to the OFT’s clampdown on unfair competition in the construction and housebuilding materials industries, which is part of a £167m plan to stimulate competition in UK industry over the next three years.
John Vickers, the OFT’s chairman, said the West Midlands roofing case was likely to be the first in a series of cartel cases in the industry.
He said: “Evidence of cartel activity in the construction sector – from leniency applicants and site visits – is mounting. This cartel rigged bids – so raised prices – on contracts relating to a number of schools, a community library, a shopping centre and a car park. The victims were council tax payers in the West Midlands.”
Evidence of cartel activity in the construction sector is mounting
John Vickers, OFT chairman
The OFT can offer leniency to firms that come forward with information about a cartel that they are involved in. Total immunity from financial penalty is available to the first member of the cartel to come forward with relevant information. This was used by Briggs Cladding and Roofing, which came forward with details of the cartel.
The other businesses fined were: Brindley Asphalt (£80,550), The General Asphalte Company (£63,192), Howard Evans (Roofing) (£45,322, after a 50% reduction for leniency), Redbrook Mastic Asphalt and Felt Roofing (£17,802), Rio Asphalt & Paving Company (£45,049), and Solihull Roofing and Building Company (£26,606).
Last week the Dutch equivalent of the OFT announced that it would be prosecuting firms, including contractor HBG’s parent Royal Bam.