CPL and Fuel Express are two of the main suppliers of bagged household fuels, including coal and firelogs, and charcoal for barbecues, to large national supermarkets and petrol stations.
They have agreed to pay £3.4 million in fines for breaking competition law after a CMA investigation led them to admit rigging competitive tenders to supply Tesco and Sainsbury’s.
For each of the tenders concerned, they agreed that one of them would submit a higher bid that was designed to lose – so that the existing supplier could retain ‘its’ customer.
This is a form of bid-rigging under which competitors share out the market between them. They also exchanged competitively-sensitive confidential pricing information.
The CMA’s investigation started after intelligence work following a tip off to the CMA’s cartels hotline led the authority to carry out surprise inspections at the premises of the two suppliers.
The investigation revealed that the companies had engaged in this illegal market sharing arrangement from June 2010 to February 2011.
Stephen Blake, CMA Senior Director for Cartels, said: “Millions of people buy these products to help keep their homes warm in winter and to fire up their barbecues in summer, so it’s important that shoppers are offered the best price. This will only happen when companies compete fairly.
“Market sharing and bid rigging are illegal. They skew the market so businesses don’t have to compete for customers, who in turn are cheated out of a fair deal and can end up paying higher prices or having to make do with poorer quality products or services.
“Today’s announcement shows how seriously we take this type of activity. It’s important that all businesses play by the rules and the CMA will pursue those who break the law.”