August 7, 2008 / 8:33 AM / 9 years ago

Ice companies face U.S. price-fixing probe: report

2 Min Read

(Reuters) - U.S. federal prosecutors are probing an alleged criminal price-fixing conspiracy in the $1.8 billion market for packaged ice, with the help of a former industry executive who told authorities the collusion was nationwide and forced up prices for consumers and businesses, The Wall Street Journal reported.

In a July 23 filing in a federal court in Detroit, and in an interview with the newspaper, a former vice president of sales for Party Time Ice, Martin McNulty, disclosed new details of the ice probe and said some industry executives were caught by FBI wiretaps discussing the alleged conspiracy, the paper said.

Federal antitrust enforcers are looking into allegations that three companies, which dominate the U.S. market for wholesale ice, secretly agreed to allocate customers and regional markets among themselves, keeping ice prices high and excluding rivals, the Journal said.

In June, prosecutors unsealed charges against Home City Ice Co, Cincinnati, alleging that the company conspired to suppress competition in the Detroit market from 2001 to 2007, the paper said.

The company, which pleaded guilty to the charges, makes 4,400 tons of ice a day and is the market leader in the Midwest. It could face fines of as much as $100 million, the paper said.

In March, Reddy Ice Holdings Inc, of Dallas, said its offices were searched by the Federal Bureau of Investigation, and Arctic Glacier Inc, Winnipeg, Manitoba, said it had been served with a subpoena. Neither company has been charged with any wrongdoing, the paper reported.

The Journal said Reddy and Arctic have each issued statements saying they are cooperating with the government's investigation.

Home City is cooperating with investigators under terms of its plea agreement, the paper said.

Reddy could not be reached for an immediate comment on the report.

Citing Federal law-enforcement officials, the paper said information provided by McNulty triggered the investigation, which began in Detroit three years ago.

Reporting by Purwa Naveen Raman in Bangalore; Editing by Erica Billingham

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