Investigations Continue into Suspected UK Roofing Materials Cartel

The Competition and Market Authority (CMA) confirmed on 21 December 2017 that it will be continuing its investigation into a suspected anti-competitive arrangement or cartel in the UK roofing materials sector.

The CMA started preliminary investigations on 11 July 2017 when it published its decision to open the case and issued information requests to the businesses involved. The CMA also began conducting interviews, and visiting and searching premises to obtain information. Since then the CMA has analysed the evidence and decided to continue with the case.

The next stage is to decide if there is enough evidence of a breach of the Competition Act 1998. The law bans agreements and behaviour that prevents, restricts or distorts competition or is an abuse of a dominant market position.

Many contractors are experiencing problems with supply of pitched roofing materials, especially large format concrete roof tiles and long delivery times are widespread. Contractors report lead times on concrete tile orders of between 6 weeks to 4-6 months, with an average wait of 16 weeks. Some roofing companies have also reported deliveries of concrete tiles that are green (under cured) with up to 15% breakages.

Investigations by the CMA can be as a result of complaints to its Cartel Hotline (usually from other businesses adversely affected), information from industry whistle blowers, or they can be a consequence of the CMA’s own research and market intelligence.

If a business is found to have been part of a cartel the CMA can impose a fine up to any amount.

Businesses that have formed a cartel can apply for immunity from prosecution in exchange for disclosing information about the cartel. Employees and directors can also apply.

Cartels usually involve a mixture of price fixing where businesses agree with competitors to fix their prices, and limiting production to drive demand and ensure higher prices are maintained. Other typical anti-competitive behaviours are agreements to share sources of supply, markets or customers, or agreements to fix prices vertically between producers and distributors.

Since 2002 there have 9 investigations by the CMA involving the roofing sector. Five cases were for anti-competitive practices which include cartels. Other cases involved collusive tendering, bid-rigging and mergers.

Advertisement

LEAVE A REPLY

Please enter your comment!
Please enter your name here