Posted 23rd Jan 2017

CMA fines furniture parts makers £2.8m

By KBBDaily on 23rd January 2017 - 11:05am

The Competition and Markets Authority – CMA – has fined two furniture parts makers – namely Thomas Armstrong (Timber) Ltd and Hoffman Thornwood Ltd, which supply drawer parts to the UK bed industry – a total of £2.8m for what it calls “illegal cartel activity”.

According to the CMA, the two companies have admitted 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 its parent company Thomas Armstrong (Holdings) Ltd will pay a maximum penalty of £1.5m in relation to what the CMA identified as a drawer wraps cartel, when it supplied chipboard and MDF-based drawer wraps to the bed, office and domestic furniture industry in the UK between April 2006 and September 2008.

Thomas Armstrong will also pay £684,000 in relation to a drawer fronts cartel, plus Hoffman Thornwood Ltd and its parent company Consolidated Timber Holdings Ltd will pay a fine of £688,000 for the same. According to the CMA, a third company, BHK (UK) Ltd was also involved in the drawer wraps cartel but will not be fined as it confessed its involved shortly after the start of the investigation and is co-operating with the CMA.

“When competitors collude like this, they do so at the expense of customers, increasing prices, and reducing quality and choice,” said Stephen Blake, CMA senior director for cartels. “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,” he added.

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.

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