Derry construction firm FP McCann to appeal £25.5m 'cartel' fine
SOUTH Derry construction giant FP McCann is vowing to "robustly appeal" a £25.5 million fine - one of the biggest in Northern Ireland corporate history - imposed for its role in an alleged price-fixing cartel.
It was implicated along with two English firms following a years-long investigation by the Competition and Markets Authority (CMA).
The CMA found that the companies broke competition law by taking part in an illegal cartel in Britain from July 2006 to March 2013, when the companies agreed to fix or coordinate their prices, shared the market by allocating customers and regularly exchanged sensitive information.
“These companies entered into illegal arrangements where they secretly shared out the market for important building products and agreed to keep prices artificially high. This is totally unacceptable as it cheats customers out of getting a good deal,” the CMA said.
Last year two of the firms - Derbyshire-based Stanton Bonna Concrete Ltd and CPM Group Ltd in Somerset - admitted engaging in the arrangements, and because of their pleas they received reduced fines of £7.5m and £4m respectively.
But FP McCann, which headquartered at Knockloughrim near Magherafelt, did not make any admissions of guilt.
And as a result, the watchdog hit the company with a whopping fine of £25,449,676.
The CMA claimed the three companies held regular secret meetings to set up and operate the illegal cartel, and said they were "leading players", accounting for over half of the market (from 2010 onwards they held over 90 per cent of pre-cast concrete drainage products market).
Pre-cast concrete products, such as drainage pipes, are of crucial importance to large infrastructure projects and are often used in roads and railways or water management projects.
Customers for these products include engineering and construction firms, utilities providers and local and national government across Britain.
CMA chief executive Andrea Coscelli said: “These three companies entered into illegal arrangements where they secretly shared out the market for important building products and agreed to keep prices artificially high. This is totally unacceptable as it cheats customers out of getting a good deal.
“The CMA will not hesitate to issue appropriately large fines in these cases and we will continue to crack down on cartels in the construction sector and in other industries.”
But in a statement to the Irish News, FP McCann - which employs nearly 1,600 people and last year had a turnover of £254 million - is denying any involvement in the case and confirmed it will appeal the decision.
A spokesman said: “We fully co-operated with the investigation by the CMA and we are very disappointed at this decision, which we will be robustly appealing.
“FP McCann is fully committed to compliance with UK law.”
If it does have to ultimately pay the fine, it will more than wipe out last year's bottom line profit of £16.4m at FP McCann, which has enjoyed a stellar period of growth over the last decade, expanding the business both organically and through acquisition.