Three water tank firms have been fined over £2.6 million after admitting to participating in an illegal cartel concerning the supply of cylindrical galvanised steel tanks in the UK.

Under their own arrangements, Franklin Hodge Industries Ltd, Galglass Ltd and Kondea Water Supplies Ltd agreed with each other, and with CST Industries (UK) Ltd, to share the galvanised steel tank market between them, fix prices and rig bids between 2005 and 2012.

Each company decided up customers among themselves and agreed prices for a range of galvanised steel tanks.

Under the cartel, if a customer had been allocated to a particular company, that company would quote a lower price for the job with the other members quoting a higher price, so as to give the appearance of competition.

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Regular meetings between the companies to reinforce and agree these regulations occurred over a seven-year period, as well as through contacts concerning particular bids.

However, provided it continues to comply with the other conditions of the Competition and Markets Authority's leniency policy, CST Industries (UK) Ltd, together with its parent company, CST Industries Inc, will not receive a fine, having reported the cartel to the CMA's predecessor and co-operated with the investigation.

The CMA also conducted a related criminal investigation into whether individuals had committed an offence under section 188 of the Enterprise Act 2002, the criminal cartel offence.

This resulted in one conviction following a guilty plea and two acquittals following a trial by jury.

CMA Executive Director with responsibility for enforcement, Michael Grenfell, said: "Vigorous competition between businesses has benefits for customers and for the economy, keeping prices down and encouraging businesses to be more efficient and to improve quality.

"The companies in this case agreed to restrict competition, with the aim of maintaining or increasing prices for galvanised steel tanks – an important product which forms part of the water sprinkler systems used in buildings to protect the public against fires."

(LM)