Jersey’s competition watchdog is investigating suspected price-fixing cartels operating in the island’s transportation, logistics and storage sector, Express has learned.

The Jersey Competition Regulatory Authority said it is “in possession of information” which suggests that two or more businesses “have been party to an agreement which may have detrimentally effected competition in this sector”.

The regulator is asking anyone who has information to suggest that price-fixing might be taking place to contact the authority.

It says it cannot comment any further because the investigation is live.

The JCRA this week sent an open letter to scaffolding businesses in the island after “receiving information which suggests that competition may not be working effectively in this sector” – but industry members denied that any price fixing or profiteering has taken place.

Previously, the regulator has carried out several “market studies” into various sectors, including groceries, school uniforms and the freight market.

At the end of the latter study, it recommended that the freight industry should establish a Freight Trade Association “to drive efficiency and support innovation in the sector”.

It also said the Government should “develop a policy framework to support effective competition in the freight logistics sector, including a Ports Policy”.

Previous JCRA investigations following tip-offs include looking at the supply of fuel in the island and the price of wholesale broadband.

How does the watchdog define ‘cartel’?

The JCRA defined cartels as entities which “deprive customers and fair dealing businesses of the benefits of fair competition”, harming consumers by “raising prices, limiting choice and lowering quality”.

Over time, they say this undermines “competitiveness in the wider economy, hindering innovation, productivity and growth”.

Cartel activities may include:

  • Price fixing – when rival businesses agree what price they’re going to charge or pay.
  • Resale price maintenance – when a supplier and retailer agree what price the retailer will charge.
  • Bid rigging – when rival businesses communicate before lodging their bids and agree amongst themselves who will win a contract.
  • Cover pricing – a form of bid rigging where businesses agree to lodge bids that are deliberately intended to lose, so as to make another bid look more competitive.
  • Market sharing – when rival businesses agree to divide a market (for example which
    geographic regions or customers each business will sell to) so that the businesses are
    sheltered from competition.
  • Wage fixing – when businesses that compete for the same types of workers fix salaries or rates of pay.
  • Agreeing output restrictions or quotas – when rival businesses agree to limit how much they will produce so that they can increase prices.
  • Information sharing – when rival businesses reduce competitive uncertainty between them by sharing confidential information (such as the prices they plan to charge in future).

The JCRA noted that it operates a leniency policy, meaning any business involved in a cartel may be able to have its financial penalty reduced – sometimes even in full – by owning up.