Plumbing firms fined £68 for price fixing
00:00 27 Sep 2006
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Five UK plumbing firms have been fined a total of £68m for price fixing in copper fittings over the last 20 years by the European Commission.
They now face censure and possible expulsion from the Association of Plumbing and Heating Contractors (APHC) if their appeals fail.
The lion’s share of the fines was levied on IMI UK (£32.4m) and Delta UK (£18.98m), with Advanced Fluid Connections being fined £12.1m, Tomkins Pegler UK £3.5m and Flowflex UK £904,000. They were part of a cartel of 30 companies throughout Europe fined a total of £211m last week, that includes Aalberts, Legris, Frabo, Mueller, Viegener and Sanha Kaimer.
The Commission claims that between 1988 and 2004 the companies fixed prices, discounts and rebates, agreed on mechanisms to co-ordinate price increases, allocated customers and exchanged confidential information. APHC chief executive Clive Dickin said: “This will inevitably have resulted in higher prices and affected the total profitability of a project for our members and other organisations.”
IMI and Delta are the two largest members of the APHC in the pipes section. If their appeals to the Commission fail, they could possibly be expelled. Four of the groups, including Delta and Advanced Fluid Connections (AFC), had their fines increased by 60% because they continued their illegal arrangements after the Commission’s initial inspections. AFC’s fine was increased by a further 50% for providing the commission with misleading information. Mueller was given full immunity from fines under the Commission’s leniency programme as a whistleblower. It came clean after documents were discovered during on-site inspections. By the close of the investigation, the Commission had amassed 80,000 pages of documents spanning nearly 20 years.
As far back as 1988, hand-written notes revealed that the UK competitors increased prices based on a specific coded figure for each company. In 2001, all the competitors met in Paris to discuss price increases country by country and company by company. They discussed a new price structure for the UK. It is understood that some of those fined plan to appeal. AFC went into receivership in the spring.
[Contract Journal, 27 September 2006, p 3]