An international investigation into possible collusion between suppliers and shipping groups over pricing has been launched.
The UK’s Competition and Markets Authority (CMA) is teaming up with fellow competition bodies in the US, Canada, Australia and New Zealand, the so-called ‘Five Eyes’ nations, to detect and investigate collusion between suppliers or shipping groups to hike prices during the pandemic disruption.
UK businesses found to be colluding could be fined up to 10 per cent of global turnover and directors could be disqualified or face criminal prosecution.
Costs at five times pre-pandemic levels
Shipping companies have posted a second year of record profits due to post-pandemic demand and supply chain disruption, while companies are facing costs of five times pre-pandemic levels or more.
Agencies in the ‘Five Eyes’ nations – the name given to an intelligence alliance consisting of the US, the UK, Canada, Australia and NZ that dates back to the Second World War – say they have received “multiple complaints” from businesses about supply chains, including soaring shipping fees.
The CMA says many businesses and individuals have worked hard to minimise the impact of these disruptions. The agencies are concerned, however, that some unscrupulous businesses could take advantage of the disruptions to engage in anti-competitive collusion and practices that cheat other businesses and ultimately consumers.
According to a recent Institute of Export and International Trade (IOE&IT) report, shipping demand rebounded strongly in 2021 after the initial 2020 downturn of the pandemic. Sales in 2021 jumped by more than half (55 per cent) to 61.8 billion dollars, with the ocean container shipping segment up by 65 per cent.
Broad remit on investigation
The group has a wide remit and in addition to the CMA, is made up of the US Department of Justice, the Australian Competition and Consumer Commission, the Canadian Competition Bureau and the New Zealand Commerce Commission.
The group will “meet regularly to develop and share intelligence to detect and investigate suspected anti-competitive behaviour and collusion”.
CMA executive director of enforcement, Michael Grenfell, said: “These are global issues that are best addressed together. With support and intelligence from partner agencies across the world, we can step in and take enforcement action if we find evidence of anti-competitive behaviour taking place.”
In autumn, according to the Daily Telegraph, MakeUK, the trade body which represents manufacturers, called on CMA to examine how rocketing transport prices can be justified.
The Competition and Markets Authority is the competition regulator in the United Kingdom. It is a non-ministerial government department in the United Kingdom, responsible for strengthening business competition and preventing and reducing anti-competitive activities.
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