CRH facing €98m fine for alleged price-fixing in Switzerland

CRH is facing a €98 million fine in Switzerland following a 2½-year investigation by Weko, the Swiss competition commission, into alleged price-fixing by suppliers of bathroom fittings.

The company told the stock market yesterday Weko has proposed levying the fine on three of CRH’s Swiss subsidiaries – Bauhandel, Gétaz-Miauton and Regusci Reco – that operate as builders merchants.

CRH said a draft decision from Weko yesterday proposed levying a fine of 283 million Swiss francs (€232 million) on various members of the Association of Swiss Wholesalers of the Sanitary Industry, with the fines allocated based upon the companies’ sales figures.

They have been asked to prepare responses to the draft decision. It is expected a final determination will not be made until at least the end of 2014. At that stage, the companies will be able to avail of an internal appeals process, with the further option of legal action against Weko should the appeals fail.

CRH rejects claims

“CRH believes that the position of [Weko] is fundamentally ill-founded and views the proposed fine as unjustified. The group intends to respond to this effect in its comments to [Weko],” it said.

According to Weko’s 2013 annual report, the investigation into allegations of price-fixing in the Swiss bathrooms industry was opened in November 2011. The authorities sent out questionnaires to the companies, including CRH, as well as to the association.

“Physical and electronic data [was] seized during unannounced inspections and analysed. Numerous interviews with parties and witnesses were held in the autumn of 2012,” Weko said.

Last year, the companies were sent a further round of questionnaires based upon the evidence collected, and negotiations were conducted between Weko and the association “on an amicable settlement” prior to final hearings. It is understood the investigation centred on alleged fixing among wholesalers of the gross prices for bathroom fixtures and fittings, as well as the alleged co-ordination of price movements between association members.

The proposed fine would appear to be the largest ever faced by CRH, which has become embroiled in various scrapes with competition authorities around Europe in the last two decades.

Last December, the Polish courts upheld a fine levied on CRH after a 2009 investigation into price-fixing in the cement industry. CRH’s Grupa Ozarow unit was fined €21 million.

CRH was hit with a €530,000 fine after one of Grupa Ozarow's staff allegedly tried to interfere with documents during a price-fixing investigation.CRH fought for almost a decade a €2 million fine levied in the mid-1990s by European courts for price-fixing by Irish Cement. The fine was eventually upheld by the European Court of Justice in 2004.