Allegations that small home heating oil distribution companies were bullied and intimidated by larger operators into joining a price-fixing cartel in Galway were made yesterday during the trial of a small Loughrea-based oil distributor.
Michael Flanagan, of Rathfarn, Loughrea, Co Galway, trading as Flanagan Oil at the same address, denied two charges of being involved in a cartel which fixed the price of gas oil and kerosene home heating oil between January 1st, 2001, and February 11th, 2002. Another company, Muldoon Oil Ltd, and its director, Conrad Muldoon, of Athenry Road, Loughrea, pleaded guilty to the charge.
Denis Vaughan Buckley, SC, prosecuting, said the trial was the first of its type in Europe. The prosecution would seek to prove that Flanagan Oil conspired with 12 other oil companies from counties Galway and Roscommon to fix the price of gas oil and kerosene oil and that operating a cartel of this nature was a criminal offence under the Competition (Amendment) Act, 1996.
The Competition Authority began an investigation into alleged price-fixing by oil companies in Co Galway in 2001.
Joe Mulcair, a former lorry driver for one oil company allegedly involved in price-fixing, told the court he had been told by his employer in the spring of 2001 to attend a meeting of the Connacht Oil Promotion Federation - a group of oil distribution company directors and employees operating in Galway.
The meeting, Mr Mulcair said, was chaired by "Mr L" - a director of a named major home heating oil distribution company. "Mr L" fixed the oil prices and other group members agreed at the meeting to adhere to them.
Under cross examination by Paul Flannery, SC, for the defence, Mr Mulcair agreed that small operators such as Michael Flanagan, whose company operated just one truck, were bullied and intimidated into attending these meetings and were being forced to join the cartel or else face financial ruin because the larger companies would undercut them.
Witness Deirdre Devaney told the court she worked for the same company as Mr Mulcair and in 2000 she objected to a price list he wanted her to use as it was not the price list regularly supplied by the company's wholesale oil supplier. The director of her company told her to use the list. She told the court that list was used for home heating oil customers while the authorised wholesale price list from the oil supplier was adhered to for commercial customers only.
Competition Authority legal adviser David McFadden said three price surveys showed evidence of price-fixing and the operation of a cartel.
The trial continues today.
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