Pipe fitting maker McWane responds to FTC allegations of price fixing, denies accusations

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BIRMINGHAM, AL, Jan. 5, 2012 -- Responding to a civil complaint filed yesterday by the Federal Trade Commission, McWane Inc., manufacturers of ductile iron pipe, valves, hydrants, and fittings, said it is "deeply disappointed" by the FTC's unjustified action.

The FTC filed complaints against the three largest U.S. suppliers of ductile iron pipe fittings, McWane Inc., Star Pipe Products, Ltd., and Sigma Corporation, alleging that, beginning in 2008, the companies illegally conspired to set and maintain prices for pipe fittings.

The FTC alleges that McWane invited Sigma and Star to collude with it when it communicated to them a plan to raise and fix prices for imported ductile iron pipe fittings (DIPF) in early 2008. The FTC alleges that Sigma and Star accepted McWane's invitation to collude and, to further the conspiracy, each raised its prices for imported DIPF in January 2008 and again in June 2008. Between June 2008 and January 2009, according to the FTC, the three firms exchanged information documenting the volume of their monthly sales through a trade association called the Ductile Iron Fittings Research Association (DIFRA), and each company used this information to monitor whether the other co-conspirators were adhering to the terms of their collusive arrangement.

McWane emphatically denied the FTC's allegation that it participated in improper information exchanges and price signaling. "At no time did anyone from our company collude with a competitor about pricing," said McWane President G. Ruffner Page. "The only information that DIFRA gathered and distributed was old and aggregated sales volume totals that were limited to a six-month period and submitted on a blind basis to an accounting firm. There was nothing anti-competitive about DIFRA's work, which is the type of data gathering common among all industry associations and is designed to help the members plan production schedules."

Sigma has settled the FTC's charges, agreeing not to engage in similar anticompetitive tactics in the future. The complaint against McWane and Star will be heard before an administrative law judge later this year.

"We will fight this with every resource at our command, and we will to prevail on behalf of American jobs and our economy," said McWane President G. Ruffner Page. "At a time when we are struggling to survive in the face of unfair foreign competition, it is sad and disappointing to be attacked by an agency of our very own government. The millions of dollars that we will spend vindicating ourselves could have been better spent preserving the jobs of our team members."

Click here to read McWane's full prepared statement >

Click here to read FTC press release >

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