UK regulator joins five-nation effort against supply chain price hikes

The UK competition watchdog is teaming up with its counterparts in the US, Canada, Australia and New Zealand in a drive to detect and investigate collusion between suppliers or shipping groups to hike prices.

The Competition and Markets Authority said it was linking up with its fellow agencies in other “five eyes” nations after receiving “multiple complaints” from businesses about supply chains, where, for example, fees for shipping have soared by up to 10 times compared with pre-pandemic levels in the past two years. The CMA said that despite the complaints it was yet to find evidence of potential breaches of the law.

A new working group made up of the US Department of Justice, the Australian Competition and Consumer Commission, the Canadian Competition Bureau and the New Zealand Commerce Commission is planning to “meet regularly to develop and share intelligence to detect and investigate suspected anti-competitive behaviour and collusion”.

The agencies released a coordinated statement saying they were “putting firms on notice that those attempting to use supply chain disruptions as a cover for illegal anticompetitive conduct, including collusion, will face the full force of the law”.

It is understood the remit is broad, covering sectors including retail, healthcare and agriculture.

In the UK, businesses found to be colluding could be fined up to 10% of global turnover and directors could be disqualified or in some cases face criminal prosecution.

Michael Grenfell, the executive director of enforcement at the CMA, urged anyone aware of anti-competitive behaviour to contact the watchdog’s cartels hotline. He said: “People and businesses across the world have been facing higher prices for goods and for transporting them.

“While price rises can be legitimate, the CMA would be concerned if collusive anti-competitive practices are contributing to these rises or preventing prices from coming down.

“The CMA is ready to use its legal powers where it finds evidence that the issues in the supply chain might be caused by potential breaches of competition law.

“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.”

Businesses have been warning for some time of the impact of the surging cost of moving goods, which is partly responsible for inflation in the cost of goods and a squeeze on household spending.

MakeUK, which represents the manufacturing industry, and the British Chambers of Commerce, wrote last autumn to the CMA, asking it to look into the world’s biggest shipping companies and whether soaring costs could be justified.

Their complaints came as the biggest global shipping firms were expected to make extraordinary profits in 2021.

The CMA told industry groups it would monitor the situation, but informed them it was not able to address the price rises unilaterally, because shipping costs were “the product of multiple factors, often international in nature”.

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