Two firms that make furniture parts have agreed to pay fines totalling £2.8m for illegal cartel activity, following a Competition and Markets Authority (CMA) investigation.
The companies, which supply drawer parts to well-known furniture manufacturers such as Silentnight, have admitted that they broke competition law by agreeing not to compete on price and sharing out which customers they would supply – reducing customer choice and giving the appearance of competition where there was none.
Thomas Armstrong (Timber) Ltd and Hoffman Thornwood Ltd have agreed to pay the fines after admitting market sharing, co-ordinating prices, bid-rigging and exchanging commercially-sensitive information.
Another manufacturer, BHK (UK) Ltd confessed its involvement in cartel activity shortly after the start of the investigation and will not be fined, provided it continues to co-operate with the CMA, and complies with the other conditions of the CMA’s leniency policy.
Stephen Blake, CMA senior director for cartels, says: "When competitors collude like this, they do so at the expense of customers, increasing prices, and reducing quality and choice. In this case, the collusion concerned products which are found in furniture in homes and offices across the UK.
"Today’s settlement demonstrates the CMA’s determination to pursue those who take part in anticompetitive behaviour, which is harmful to consumers, businesses and the wider economy."
Following intelligence received via the cartels hotline, the CMA investigated two separate infringements of competition law involving the supply of drawer components to UK furniture makers.
The infringements admitted relate to: the supply of chipboard and MDF-based drawer wraps to the bed, office and domestic furniture industry in the UK, between April 2006 and September 2008, involving BHK (UK) Ltd and Thomas Armstrong (Timber) Ltd (the drawer wraps cartel); and the supply of chipboard and MDF-based drawer fronts to the bed industry in the UK, between July 2006 and September 2008, and between at least September and October 2011, involving Thomas Armstrong (Timber) Ltd and Hoffman Thornwood Ltd (the drawer fronts cartel).
