CMA - One Year On
It was a ruling that was supposed to shake up the UK demolition industry. It didn't.
On 23 March 2023, one year ago tomorrow, 10 members of the National Federation of Demolition Contractors received fines with a combined value of almost £60 million following a four-year investigation into bid-rigging and price-fixing.
Those fines, and the director bans that accompanied them, should have rocked the sector to its very foundations. For a while, it was the only topic of conversation across the sector; among those here in the UK that were living and witnessing it first-hand; and further afield where other demolition nations looked on with growing disbelief.
But a full year on, and it seems that surprisingly little has actually changed.
One of the 10 companies named - Squibb Group - collapsed at the end of last year while still claiming that the £2.0 million CMA fine levied against it was “excessive”. But when the company went under, the fallout from COVID-19 and a negative shift in scrap sales were cited as the contributory factors. And £2.0 million was mere chump-change compared to the debts of more than £23 million that finally sank the firm.
However, Squibb Group proved to be the exception rather than the rule. Each of the other companies named - Brown and Mason, Cantillon, Clifford Devlin, DSM, Erith, John F Hunt, Keltbray, McGee, and Scudder - have continued to go about their business as if nothing happened. Most of them appear to be doing just fine; some are thriving, despite the CMA’s findings.
The wider industry - the clients and main contractors that employ demolition companies - either have very short memories or are willing to look the other way; to forgive and forget.
Equally forgiving have been the UK’s two demolition industry trade bodies, neither of whom imposed any kind of sanction on the companies and the individuals that so publicly brought their respective organisations into disrepute. No heads rolled; no swords were fallen upon. Apparently, the need to maintain membership numbers far outweighs any desire for legitimacy. Later today, there is a possibility that three of the guilty companies could leave the NFDC AGM with an award.
In the days and weeks that followed the imposition of the fines, there was much speculation about the guilty parties being banned from tender lists; there were suggestions that the fines would be merely the tip of the iceberg for the firms named; and there was some quietly spoken hope that innocent or exonerated companies might enjoy their moment in the sun while the cloud of collusion hung over the CMA 10.
None of that came to pass. The status quo was quickly restored even as the guilty 10 were licking the financial wounds inflicted by those hefty fines.
Hopefully, those fines proved sufficiently chastening to make other demolition companies think twice before engaging in similar anti-competitive practices.
However, given the short memory of the wider industry and the lack of further sanctions in the wake of the CMA investigation, the temptation will likely remain long after the bitter sting of those fines has been assuaged.