Keltbray lands increased £18m fine after losing bid-rigging appeal

(Photo: Keltbray)

Keltbray was one of 10 companies found by the Competition and Markets Authority (CMA) to have rigged bids for demolition contracts.

It was one of eight companies to have entered a settlement agreement with the CMA, in which it admitted liability for eight infringements in June 2022, in return for a reduced penalty.

In 2022, the CMA announced that Keltbray would have to pay £16 million – a sum which included a 20% reduction by the CMA on the original penalty of £20 million. The CMA set the penalty, based on a percentage of Keltbray’s revenue.

But Keltbray announced in 2023 that it would appeal the penalty, arguing that the penalty was excessive on the basis that it did not instigate any infringement activity or benefit financially from the infringements.

It said it was “disappointed” with the level of the penalty, especially when, it claimed, other organisations had benefitted financially from their activities.

In its subsequent appeal, it argued that the CMA’s calculation was incorrect for three reasons:

1. It had calculated the penalty incorrectly by basing it on Keltbray’s entire market revenues over a broadly defined market and that it should have used the relevant tender values instead.
2. The CMA had included revenues from Keltbray’s ‘Highly Complex Demolition Services’ in its penalty calculation, which Keltbray argued was different from the ‘General Demolition Services’ market.
3. The £20 million penalty was “excessive in all circumstances”.

But a decision by the Competition Appeal Tribunal, handed down at the end of last week (20 December), held that the CMA was “broadly correct” when it considered the penalty guidance.

The tribunal adjusted the penalty to £18 million and it is that figure that Keltbray will now have to pay, having lost the right to a 20% reduction after making the appeal.

Other companies to have been found guilty of bid-ridding during the investigation were Brown and Mason, Cantillon, Clifford Devlin, DSM, Erith, JF Hunt, McGee, Scudder, and Squibb.

But only Keltbray persisted in an appeal. Squibb originally launched an appeal but later withdrew it.

In a response to the Competition Appeal Tribunal’s decision, Keltbray said in a statement, “Keltbray acknowledges the decision issued by the CAT and expresses disappointment with the outcome of its appeal. While we had hoped for a different conclusion, we respect the CAT’s decision and accept their findings.

“The events that led to this investigation are deeply regrettable, and as a business, we have moved forward over the proceeding years with a fresh new approach, grounded in transparency, integrity, and compliance with the highest standards.

“In light of the original findings, Keltbray immediately took significant steps to overhaul our practices and enhance our commitment to fair competition. We instituted new internal policies, strengthened oversight, and reinforced our ethical framework to ensure that we continued to operate in full compliance with all regulatory requirements.

“We remain fully committed to our customers, partners, and stakeholders and will continue to prioritise delivering the quality and innovation they expect from us. Our goal has been and remains to learn from this experience, ensuring that Keltbray emerged stronger and more resilient as we continue to pursue our long-term vision.”