Industry practices face scrutiny if probe uncovers foul play

Any prospect of the final few weeks of 2014 fizzling away without incident were pretty much obliterated at the end of August when the Competition and Markets Authority (CMA) revealed it was looking into suspected breaches of competition law in the commercial catering equipment sector.

Officials have spent the past three months gathering information relating to “anti-competitive practices” in the market as they bid to piece all the facts together and decide their next move.

The CMA is not one to dish out details while its work is ongoing, but what we do know is that it is getting closer to making a decision on whether its suspicions merit further action.

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Back in August, the CMA estimated that it would need at least three months to acquire information, speak to the parties at the centre of the investigation and review the evidence. That plan is firmly on track, according to the organisation.

“We are planning to make a further announcement in December, so we are on [on track with the] timetable as it were,” said a spokesperson this week. “These things sometimes do slip or get put back for various reasons, but at the moment we are on schedule.”

The CMA has so far revealed very little about what exactly it is looking into, although that hasn’t stopped the market contemplating what it might be.

Speculation is rife that it involves something to do with price fixing or minimum advertised pricing. The fact the case type is filed under the heading of ‘CA98 and Civil Cartels’ has certainly done nothing to quell those suggestions, especially when the CMA’s own definition of cartels is ‘an agreement between companies to fix prices, share markets, rig bids or limit output at the expense of the interests of customers’.

However, until the CMA provides further information it is impossible to say for sure and the speculation will remain just that.

The catering equipment industry can at least console itself in the knowledge that it is not the only market sector to feel the breath of the CMA on its neck.

Other recent investigations into anti-competitive practices have involved sectors as diverse as bathroom fittings and steel water tanks to sports bras and pharmaceutical products.

It is quite possible that the CMA may uncover no evidence of anti-competitive behaviour whatsoever and the investigation will be abandoned, in which case we shall probably never know who was under scrutiny or what prompted it — not officially anyway.

On the other hand, if there is a case to answer, the catering equipment market is going to start 2015 with the spotlight firmly shining on it for all the wrong reasons.

Last month, the CMA published the results of an in-depth investigation into anti-competitive agreements in the mobility aids sector, which found that a manufacturer and eight retailers had infringed regulations around the online sale of mobility scooters.

That investigation took more than two years to complete and ended with the publication of a 200-page report on the anti-competitive practices of the parties involved, including email conversations between sales reps and interview transcripts with senior management figures.

While it does not have anything to do with the catering equipment market, it does give an indication of what might be to come if the decision is taken to proceed with the investigation.

The CMA’s next move is eagerly anticipated. It could well prove to be a watershed moment for the industry.

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