OFT acts to stop price-fixing on building materials

The Office of Fair Trading has announced a crackdown on price cartels in the construction and housebuilding materials industry.

Eliminating unfair trading practice in housebuilding and construction will be a priority area for the OFT over the next three years, as part of a £166.6m plan to boost fair competition in UK industry.

The OFT said the roofing and double-glazing industries would come under particular scrutiny, along with service providers such as estate agents.

This will come as a relief to social landlords that are heavily reliant on materials suppliers to help them meet the decent homes standard.

Housebuilders welcomed the move.

A spokesman for Willmott Dixon said: “Any measure to improve competition and ensure customers get a good deal has to be good.”

We know it’s a problem because of the number of companies that own up to working as a cartel Office of Fair Trading

Last March the OFT prosecuted nine roofing contractors for agreeing to fix the price of repair, maintenance and improvements to flat roofs in the West Midlands through collusive tendering. The nine were fined a total of £330,000 for the fixed prices they charged institutions including schools and libraries.

The OFT was unable to estimate the cost to customers of price-fixing in construction.

A spokesman said: “It’s akin to the black market and very hard to quantify. But we know it’s a problem because of the number of companies that come forward to own up to working as a cartel.”

Another priority for the OFT will be to ensure competitive practice in public procurement.

A spokeswoman for the OFT said: “We’re still researching which areas would most benefit from our attention. It’s of great importance because of the sums involved.”