Renegade Conservatory Guy

Glass fixing cartel fined - a great day for the double glazing industry!

It has long been a subject of discontent in the UK double glazing industry; the way the four main glass producers have put their prices up on the same day and by the same uplift.

It has been a disgrace how these multinational corporations have used uncompetitive price fixing to strangle an industry already struggling to make a profit. They have also saught to take advantage of rising oil prices by the unjust implementation of ‘energy surcharges’.

We’ve known for years they’ve been running a cartel.

So, today I was delighted to hear that the EU have caught them at it and fined them heavily as follows:

Guardian - 148m euros
Pilkington - 140m euros
Saint-Gobain - 133.9m euros
Glaverbel - 65m euros

The European Commission said the firms had raised or stabilised prices in 2004 and 2005 through illicit contacts.

“The companies will have done very well out of this cartel until today,” EU Competition Commissioner Neelie Kroes told reporters in Brussels.

“It is right that the punishment in this case is severe in order to achieve a sufficient deterrent effect and it is a great pity that the Commission’s many previous cartel decisions did not deter the companies from forming the cartel,” she added.

Between them they control 80% of Europe’s market for flat glass. Basically, in the UK if you want to buy glass then you have to buy it from one of these companies.

The average company in the glass and glazing industry has been struggling along with an average net profit of 1.4% while these companies have been agreeing price rises between them to ensure their own profits, rather than competing fairly and making profits through trading efficiently.

The question now is the impact this decision will have on the market.

Will these companies continue to collude but more discreetly? Will they decide that the best way to increase profits is by innovation? Will they seek to recoup the fines through higher prices? Or, will our industry be able to renegotiate glass prices with these suppliers for the benefit of all?