British firm fined £30m for its part in plumbing cartel

The UK engineering company IMI was fined €44.98m (£30.5m) yesterday for taking part in a 12-year scam with European competitors to keep up the cost of plumbing equipment.

The UK engineering company IMI was fined €44.98m (£30.5m) yesterday for taking part in a 12-year scam with European competitors to keep up the cost of plumbing equipment.

The IMI group, made up of IMI plc, IMI Kynoch Ltd, and Yorkshire Copper Tube Ltd, was one of eight companies running an elaborate cartel to keep up prices for water, heating and gas tubes, and squeeze out cheaper rivals.

Announcing the fine, the European Commission said the companies "operated a well-structured, classic cartel, with codenames, meetings in anonymous airport lounges and the clear objective to avoid competition".

The Commission quoted notes from one of the companies involved, taken at the cartel's first meeting of European firms in 1989 in Zurich, which said; "The objective is to keep the prices in the high price level ... if possible to increase even more."

The illegal arrangement ran between June 1988 and March 2001; IMI joined in September 1989. Although IMI sold its copper tube and fitting business in 2002, it is still responsible for the findings of the Commission.

Copper piping used in house building and by industry accounts for a major use of the metal, second only to cabling. The market, including plastic-coated copper plumbing tubes, was worth around €1.15bn in 2000.

The cartel was finally exposed by one of the eight participants, Mueller Industries, based in the UK, France and the US, which blew the whistle in exchange for escaping a fine.

The other seven firms, including Sweden's Boliden and Finland's Outokumpu, were fined a total of €222.3m. IMI's penalty was the second-largest, after Societa Metallurgica Italiana's €67.1m fine.

Mario Monti, the European Commissioner for Competition, said: "Because of the companies' illegal behaviour, European consumers paid more for plumbing replacement work or when buying a house. Today's decision illustrates the relentless fight against cartels by this Commission."

Outokumpu and Boliden said they would appeal against the fine. The IMI spokesman, Graham Truscott, said: "We've got to understand the full details" before making a comment.