Water tank cartel ordered to pay £2.6m
21 Mar 2016
Three businesses have been fined over £2.6 million after admitting they participated in an illegal cartel to supply cylindrical galvanised steel tanks in the UK.
These tanks are used for water storage in commercial and industrial sites, and also supply the water used in fire sprinkler systems.
As these fines demonstrate, the CMA will not tolerate such practices
Michael Grenfell, CMA executive director
The companies agreed to pay the fines in a settlement with the Competition and Markets Authority (CMA), which was announced this week.
Under the cartel arrangements, the CMA said Franklin Hodge Industries, Galglass and Kondea Water Supplies "agreed with each other, and with CST Industries (UK), to share the market between them by fixing prices and rigging bids between 2005 and 2012".
The companies divided up customers among themselves and agreed prices for a range of galvanised steel tanks, the CMA said.
“Under the arrangement, if a customer had been allocated to a particular company, that company would quote a lower price for the job with the other cartel members quoting a higher price, so as to give the appearance of competition where in fact there was none,” the CMA said.
The arrangements had been agreed and reinforced at regular meetings, it added.
CST Industries (UK), together with its parent company, did not receive a fine, having reported the cartel and co-operated with the investigation. Franklin Hodge Industries also received a discount under the leniency policy for co-operating with the investigation, the CMA said.
“Vigorous competition between businesses has benefits for customers and for the economy, keeping prices down and encouraging businesses to be more efficient and to improve quality,” said Michael Grenfell, CMA executive director.
“The companies in this case agreed to restrict competition, with the aim of maintaining or increasing prices for galvanised steel tanks…As these fines demonstrate, the CMA will not tolerate such practices.”
