Adnams was victim of price-fixing
Suffolk brewer Adnams was a victim of the price-fixing scandal in the construction industry, the Office of Fair Trading (OFT) has revealed.
OFT investigations found two of the six firms that bid for the contract to build Adnams' £6.37m distribution centre in Southwold in 2005 were engaged in so-call "cover pricing".
This involves developers colluding in submitting bids that are artificially high. It gives an impression of competition, although some bids may not be genuine. Winning bidders would sometimes pay compensation to the other firms.
Of the two companies engaged in cover pricing for the bid, Kier Group was fined a total of £17.9m — the biggest fine given to any of the 103 construction firms implicated in the scandal. Kier Group was also found to have engaged in cover pricing over a contract at a primary school in Peterborough.
The other firm involved in cover pricing for the bid, JJ & AR Jackson limited, received a total fine of £28,963.
The OFT said: "Cover pricing left clients unaware that not all the bids they had received were genuine. As a result, they were unable to make an informed decision as to whether to seek replacement bidders, who may have been cheaper."
The OFT said clients were also given a "misleading impression of the level of competition available."
None of the fines will be paid to victims of the scandal. However, private legal action can be taken to secure compensation.
Adnams has so far been unavailable for comment.
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