UPDATE 1-US: Blue Rhino and AmeriGas colluded on propane in 2008

Thu Mar 27, 2014 6:00pm EDT

(Adds details on complaint)

WASHINGTON, March 27 (Reuters) - Two key propane suppliers, Blue Rhino and AmeriGas, illegally coordinated in 2008 by reducing the amount of propane in tanks from 17 pounds to 15 pounds without cutting the price, U.S. authorities said in an administrative complaint filed against the companies.

The two companies controlled about 80 percent of the market for wholesale propane exchange tanks at the time, the Federal Trade Commission said in a press release.

Walmart, the largest U.S. retailer, which bought from both companies, balked at what was effectively a price hike, the FTC said.

In response, sales executives from both companies spoke by telephone and emailed each other repeatedly over several months to strategize on how to force Walmart to accept its actions, the FTC said.

"This type of collusion may not be direct or visible to consumers, but can lead to higher prices or lower quality," said Deborah Feinstein, director of the FTC's Bureau of Competition.

The agency filed an administrative complaint against the companies, alleging a civil violation of antitrust laws.

The companies are Ferrellgas Partners, L.P and Ferrellgas, L.P., which do business as Blue Rhino, and UGI Corp and AmeriGas Partners, L.P., which do business as AmeriGas Cylinder Exchange. (Reporting by Diane Bartz; Editing by Ros Krasny and Sandra Maler)

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