A SUPPLIER AND BROKER of construction materials is launching a court case against the two companies who were guilty of forming a lead cartel to fix prices and restrict the supply of rolled lead to the UK market during 2015-2017.
The claim for damages is against lead manufacturers, Associated Lead Mills (known as ALM in the roofing industry) and its subsidiary Royston Sheet Lead Ltd and parent company International Industrial Metals Ltd (now International Metal Industries Ltd), together with H.J. Enthoven Ltd (trading as BLM British Lead) and Eco-Bat Technologies Ltd.
ALM and BLM British Lead were fined £1.8m and £9.5m respectively by the Competition and Markets Authority (CMA) in 2020 after they pleaded guilty to forming a cartel together.
In 2021, three directors of the businesses were disqualified: Jocelyn Campbell (BLM), Graham Hudson (ALM) and Maurice Sherling (ALM). All were directors at the time the illegal cartel activity took place. Later in 2021, BLM British Lead was suspended as a supplier member of the NFRC.
Lead Cartel Damages
Based on the CMA’s investigation into the lead cartel and the evidence from the CMA’s investigation, CBG Ltd (now renamed as Commercial Buyers Group Ltd) has accused the lead businesses of conspiring to exclude it from the rolled lead market, acting together and exchanging commercially sensitive information to form a strategy to prevent the company from obtaining lead.
In its summary of the court claim, CBG alleges that the cartel companies usually only sold lead to merchants and did not sell directly to contractors.
CBG acted as a broker, making deals with contractors to pool their lead orders and therefore secure cheaper prices. CBG says it would have ordered lead from those merchants already supplied by ALM and BLM British Lead at a greater discount than could be obtained by contractors individually.
However, CBG accuses the lead companies of colluding and acting together by agreeing to stop supplying lead to them from October 2015. CBG points to the CMA evidence findings that the lead firms shared market information and formed a strategy against CBG to stop the company entering the lead market.
CBG claims that ALM and H.J. Enthoven Ltd together shared information that revealed how each of them intended to act on the market and intended to respond to CBG as a new entrant into it.
It meant that no lead was supplied to CBG and at the time there was no reasonable alternative supplier of rolled lead sheet available. The lack of supply eventually led to CBG being forced into liquidation on 8 August 2017. However, after the CMA’s investigation into the cartel and the lead firms admitting their guilt, a court order was made to restore the company in June 2020.
Damages for Losses
The broker has asked the Competition Appeal Tribunal to order the lead cartel companies to pay damages for losses caused by it ceasing trading and for lost profits, as well as interest and costs.
Commercial Buyers Group said they have no comment at the present time.
ALM has been contacted for comment.
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