Cartelism is endemic in the motor trade in Ireland, it was claimed yesterday as a retired director of Henry Ford and Son was given a 12-month suspended sentence and fined €30,000 for assisting Ford dealers operate a price-fixing cartel. Barry Roche, Southern Correspondent, reports.
The former director of the cartel division at the Competition Authority, Ray Leonard, told the sentencing of Cork businessman, Denis Manning (68), that he believed cartels were rife in the Irish motor industry and there was only an illusion of competition.
"I believe cartelism is endemic in the industry, cartels compete with cartels . . . I say there is an illusion of competition - price fixing has removed competition," said Mr Leonard. He spent 2½ years leading an investigation into allegations of price fixing by Ford dealers.
Mr Leonard was giving evidence after Manning, of Allendale Avenue, Melbourne Estate, Bishopstown, Cork, pleaded guilty at the Central Criminal Court to a single breach of anti-competition legislation.
Manning admitted aiding and abetting the Irish Ford Dealers Association and its members in implementing an agreement aimed at preventing, restricting or distorting competition in the trade so as to fix the selling price of cars between July 2002 and June 2003.
Mr Leonard said the investigation team had seized documents and statements from Manning and a number of Ford dealers which confirmed the existence of a price-fixing agreement, which was euphemistically called a "programme for profitability".
All 53 members of the association operated the system, even though the smaller dealers weren't happy with it. Only Kellehers of Macroom refused to get involved and operate the cartel.
"Kellehers are the only ones who emerge with dignity from this sad affair," said Mr Leonard.
Mr Leonard explained that Ford Ireland had set a recommended retail price but that the dealers' association then set a lower guideline price for its members below which they could not drop their prices. If they did, they were fined a penalty of €635, he told the court.
Manning's legal team pointed out that the price-fixing arrangement was set up before he became association secretary in 1994 and said it related only to straight cash sales for new Ford cars which amounted to just 0.5 per cent of the entire Irish new car market.
They also submitted that Manning did not profit personally from administering the system, received just €9,000 a year for his work as secretary, and that he had had no decision-making role in relation to the operation of the programme.
However, Mr Justice Liam McKechnie disagreed and said he believed Manning had played a central role in maintaining and operating a highly effective cartel, which had lasted for 13 years and "was designed to corrupt the market and squeeze the consumer of cars".
He said Manning was involved in arranging meetings, dispatching e-mails, setting up the monitoring system and adjusting the information given to association members after budgets and price increases by Ford to ensure that the cartel continued to operate. Mr Justice McKechnie said he had no doubt but that people seeking to buy a car were liable to be defrauded by the operation of the cartel and "many surely were" and those involved in setting it up and running it had "done a shocking disservice to the public".
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/VR3765MFOBH2NMV2QNICYDF67M.png)