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OFT cracks down on cartel 'plague'

Duo lose price-fixing appeal as evidence mounts against others

TWO FIRMS that contested a decision by the Office of Fair Trading that they had fixed flat-roofing prices in the West Midlands have lost their appeal.

And the head of the OFT is warning that the cartel buster is close to smashing a number of price-fixing rings, which he said are beginning to plague the construction industry.

OFT chairman Sir John Vickers said more and more leniency applicants - in effect whistleblowers - have come forward with information in exchange for immunity from financial penalties.

Sir John said: 'Evidence on cartel activity in the construction sector is mounting.The West Midlands roofing case is likely to be the first in a series of construction cartel cases.'

Along with seven others, Birmingham firm Apex Asphalt & Paving and Richard W Price (Roofing Contractors), based in London, were fined a total of nearly £54,000 by the OFT last March, after being found guilty of fixing prices when tendering for flat roofing contracts between 2000 and 2002.

In all, the nine firms were fined a total of nearly £300,000.The largest fine, £80,550, was imposed on Bilston-based contractor Brindley Asphalt. Only Apex and Richard W Price contested the decision.

Last week the Competition Appeal Tribunal upheld the original OFT ruling that the pair, as well as the other seven, had agreed to fix prices - although it reduced the fine imposed against Richard W Price by half to £9,000.

The jobs affected were a number of schools, a community library, a shopping centre and a car park.

Sir John said: 'The victims were council tax payers in Dudley and the West Midlands.'

The OFT began its investigation in June 2002. It concluded that the parties'collusion in setting tender prices was intended to restrict or distort competition and meant buyers were unable to obtain competitive prices when tendering for repair, maintenance and improvement services for a flat roof locally.