The Competition and Markets Authority (CMA) has issued a final decision imposing fines totalling more than £2.7 million on a number of water tank firms for a cartel to share the market by dividing customers among themselves, to fix prices of tanks and to rig bids for contracts between 2005 and 2012.

Franklin Hodge, Galglass Ltd and KW Supplies Ltd admitted to having colluded with each other, as well as a fourth supplier CST Industries (UK) Ltd, to share the market by dividing customers among themselves, to fix prices of tanks and to rig bids for contracts between 2005 and 2012.

Galvanised steel tanks are used for water storage in larger buildings, such as schools, hospitals and other commercial and public buildings, and supply the water used in fire sprinkler systems.

The CMA’s cartel decision follows on from a settlement announced in March 2016 and a formal statement of objections in May 2016.

The firms were fined as follows:

• £2,015,135 on Franklin Hodge Industries Ltd and its parent company Carter Thermal Industries Ltd
• £587,926 on Galglass Ltd, and its parent companies Irish Industrial Tanks Ltd and Kernoff Ltd
• £22,248 on KW Supplies Ltd (as economic successor to Kondea Water Supplies Ltd)

The fines in the cartel decision - for market sharing, price-fixing and bid-rigging - include a discount to reflect savings to the CMA resulting from the companies’ admissions and co-operation with the investigation.

The companies’ aim was to improve profit margins on the tanks by avoiding customers being able to negotiate the best deal through ‘playing’ the competitors off against each other. CST Industries (UK) Ltd and its parent company CST Industries Inc. have been granted immunity from fines under the CMA’s leniency policy, having brought the arrangements to the authorities’ attention and co-operated with the investigation.

CMA secretly recorded meeting where exchange of information on pricing took place

In a separate decision, the CMA has also found that Franklin Hodge Industries Ltd, Galglass Ltd, KW Supplies Ltd and Balmoral Tanks Ltd breached competition law by exchanging information regarding their current pricing and future pricing intentions, thereby reducing uncertainty among the suppliers about their likely pricing intentions. The information included both generic and contract-specific information, in the form of price bands and prices quoted for specific contracts relating to 2 types of cylindrical galvanised steel tanks.

Balmoral Tanks Ltd and its parent company Balmoral Group Holdings Ltd has been fined £130,000 for taking part in the unlawful information exchange. The information exchange took place at a single meeting in July 2012 at which Balmoral was invited to join the cartel arrangement.

Balmoral refused, but exchanged commercially sensitive information with its competitors. The meeting was secretly recorded by the CMA.

The level of Balmoral’s fine reflects a number of factors, including Balmoral’s refusal to join the cartel arrangement and the overall pro-competitive effect of its entry on the market in late 2011, as well as Balmoral’s significant co-operation in the CMA’s civil and related criminal investigation.

Before Balmoral Tanks’ entry, the market for cylindrical galvanised steel tanks had been subject to the long-running cartel arrangement between all the UK suppliers described above; involving price-fixing, bid-rigging and market sharing by way of customer allocation. Balmoral Tanks Ltd was not a party to these long-running cartel arrangements.

CMA: exchanging information with competitors can have serious consequences for businesses involved

Stephen Blake, Senior Director of the CMA’s Cartels and Criminal Group, commented:

“Strong competition between businesses has clear benefits for customers, such as lower prices, better quality and more choice. Any weakening of competition that maintains or increases prices will ultimately be at the expense of consumers or tax payers.”

“Today’s announcement shows the CMA’s commitment to using its enforcement powers to tackle illegal anti-competitive behaviour. The information exchange decision also underlines the fact that exchanging information with competitors, even at a single meeting, can infringe competition law with serious consequences for the businesses involved.”

“Any company that is approached to join a cartel, or become involved in anti-competitive arrangements, should immediately reject the approach clearly and unequivocally. It should also decline to participate in any discussions that involve the sharing of confidential and competitively sensitive pricing information.”

Any individual or business affected by the anti-competitive behaviour in this case can rely on the CMA’s infringement decision if making a claim in the courts for damages against the companies concerned. It will be for the court to determine the level of any damages.

CMA may pay financial reward of up to £100K in return for information to identify and take action against illegal cartels

The Competition Act 1998 prohibits agreements, practices and conduct that may have a damaging effect on competition in the UK. The Chapter I prohibition covers anti-competitive agreements and concerted practices between businesses which have as their object or effect the prevention, restriction or distortion of competition within the UK.

Article 101 of the Treaty on the Functioning of the European Union (TFEU) covers equivalent agreements or practices which may affect trade between EU member states.

Any business found to have infringed the prohibitions in the Competition Act 1998 or the TFEU can be fined up to 10% of its annual worldwide group turnover.

Anyone who has information about a cartel is encouraged to call the CMA cartels hotline on 020 3738 6888 or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Under the CMA’s leniency policy a business that has been involved in a cartel may be granted immunity from penalties or a significant reduction in penalty in return for reporting cartel activity and assisting the CMA with its investigation.

The CMA also operates a rewards policy under which it may pay a financial reward of up to £100,000 in return for information which helps it to identify and take action against illegal cartels.