The Competition and Markets Authority is investigating Vp (VP.) after provisionally finding the group had colluded to keep prices in the groundworks market high.
The CMA announced that VP and two other suppliers in the construction industry – MGF and Mabey Hire – had “formed a cartel to reduce competition and keep prices up”.
The regulator’s provisional view is that Vp and MGF operated the cartel for nearly two years in total, over three periods spanning from 2011 to 2016, while Mabey took part for a single five-month period in 2014.
One of the companies blew the whistle. Mabey has confessed its role and will not be fined if it continues to cooperate. Vp noted the investigation only related to its Groundforce business and said it would “continue to cooperate fully with the CMA”. The CMA said: “No assumption should be made at this stage that any infringement has occurred.”
Mabey noted that it had "proactively raised concerns with the CMA about potential anti-competitive behaviour, and gave its full support and co-operation to their investigation".
MGF said in a statement that it had "cooperated fully" with the CMA, and that it planned to respond to the provisional findings.
The investigation was opened in February 2017 and the CMA will hear written and oral representations until July.
Shares in Vp closed the day down 15 per cent following the announcement. The group’s accounts do not break out the performance of its businesses, and a spokesperson did not comment on what proportion of either UK or international operations Groundforce comprises. Nevertheless, infringements of competition law can lead to fines of up to a tenth of a company’s global turnover. Vp’s turnover was £304m in the year to March 2018.
The announcement came the day after the group issued a trading update for the year to March 2019, when management said it expected its results to be “well ahead” of the prior year performance, despite “challenging trading conditions” in the offshore oil and gas sector.
