Harrogate firm accused by watchdog of illegal cartel activity

The accusations are believed to relate to Vp's groundworks division.
The accusations are believed to relate to Vp's groundworks division.

A Harrogate firm is one of three major northern companies that formed a cartel to jack up prices in a breach of competition law, a watchdog has provisionally found.

The Competition and Markets Authority (CMA) said that equipment hire firm Vp plc, which is based at Beckwith Knowle, Wigan-based MGF Trench Construction Systems and Dewsbury-based Mabey Hire had shared confidential information on pricing and commercial strategy, as well as co-ordinating their commercial activities. It said Vp and MGF operated the cartel for nearly two years and Mabey took part for five months.

The alleged activities came to light after Mabey blew the whistle and confessed its behaviour. In return, it will not be fined.

Michael Grenfell, the CMA’s executive director for enforcement, said: “These are three major suppliers of equipment used to keep construction workers safe. It is crucial that builders and their customers benefit from genuinely competitive pricing for this essential equipment.

“Everyone must follow competition law, which protects customers from being exploited and paying more, as well as encouraging companies to compete for business in other ways – through innovation, quality and service.

“The CMA uses its powers vigorously and robustly to root out illegal cartels.”

Last year, VP – known until 2001 as Vibroplant – recorded revenue of £304m and pre-tax profits of £41m.

In a statement, VP said it was reviewing the provisional findings and would continue to cooperate fully with the CMA.

The CMA statement added: “The CMA’s findings are, at this stage in its investigation, provisional and do not necessarily lead to a decision that the companies have breached competition law.

“The firms now have the opportunity to consider the detail of the CMA’s provisional findings and respond to it.

“The CMA will carefully consider any representations made before issuing its final findings as to whether the law has been broken.”

The CMA, which is an independent non-ministerial department, said it also runs a Stop Cartels campaign, which aims to educate businesses about which practices are illegal and urges people to come forward if they suspect a business has taken part in cartel behaviour, such as fixing prices or rigging contracts.