Several Blenheim bricklayers have been formally warned by the Commerce Commission following an investigation into suspected cartel conduct.
G J Marfell Ltd, Mike Vis Bricklaying Ltd, and bricklayers Benjamin Robertson and Andrew Dwyer may have breached breached Section 30 of the Commerce Act, which prohibits cartel conduct.
The Commission’s investigation uncovered a pattern of “courtesy calls”, including text message exchanges where the bricklayers discussed quotes for projects.
Commerce Commission chairperson Dr John Small said discussions, particularly when specific pricing was disclosed, could lead to cover pricing which was a form of bid-rigging.
He said the warnings were appropriate as while the conduct was serious, the possible harm and financial detriment was limited.
It would serve as a “significant sanction” for relatively small businesses in a small community, he added.
“While these are warnings, we want to highlight this case as it serves as an important reminder to all tradespeople that they must understand and comply with their obligations under the law.”
The Commission said the conduct, which occurred between 2020 and 2021, impacted several building projects in the Blenheim area.
The investigation was launched following a tip-off received via the Commission’s Anonymous Reporting Tool.
The Commission said the texts occurred when one bricklayer was approached by a customer that usual dealt with another bricklayer. They then discussed pricing, and in some cases, one of them then submitted an “anti-competitive higher quote” so the other could retain the customer.
The purpose of the price-fixing involved was to ensure a particular bricklayer would be awarded the work – constituting market allocation.
Small said the bricklayers’ actions likely deceived their customers who sought multiple, competitive quotes “in good faith”.
“It is crucial that sole traders and businesses take steps to ensure their commercial dealings with competitors are lawful.”
The Commission believed they also frustrated – or tried to frustrate – the investigation by failing to supply compulsorily requested information.
Cartel conduct, including price fixing, bid rigging, and market allocation, was illegal under the Commerce Act and could carry penalties of up to seven years imprisonment or substantial fines.
It occurs when competing businesses collude instead of competing to manipulate the market to their advantage.
These practices can lead to higher prices, reduced choice, and lower quality for consumers.
