Firms conspired to keep foam prices high

Delta plant involved in corporate conspiracy busted by Competition Bureau

A foam production plant in Delta was part of a decade-long price-fixing scheme that has ended with the firms involved paying $12.5 million in fines.

Valle Foam Industries, which also runs a plant in Brampton, Ontario, and Montreal affiliate Domfoam International pleaded guilty to conspiring with competitors to fix the price of polyurethane foam products made at their three plants.

The products are mainly used in carpet underlay, furniture and bedding.

It was the first conviction under Canada’s amended conspiracy law, which was updated in 2010 to tighten the law regarding collaboration and cartels.

“This investigation highlights the Bureau’s reinvigorated mandate to stop consumer harm caused by price-fixing, and to secure significant fines for these serious criminal offences,” Competition Commmissioner Melanie Aitken said.

A rival foam producer based in Toronto blew the whistle on the scheme in early 2010, gaining immunity from prosecution.

The Competition Bureau launched a nearly two-year investigation that included the use of wiretaps, several searches and the seizure of thousands of documents.

More firms are still under investigation for their participation in the cartel.

“We’re grateful for the actions of the Competition Bureau,” said Bruce Cran, president of the Consumers Association of Canada, adding he hopes to see regulators investigate more crooked pricing schemes in other industries.