A conspiracy that drove up the price of ice
In a country where ice comes both free and unwanted for months of the year, frozen water isn’t something people spend much time thinking about. And the price of ice, often an impulse buy on a warm summer day, doesn’t get much attention, either.
“They call ice the forgotten food,” said Glenn Davies, one of the partners in Victoria based Vancouver Island Ice Depot Ltd. subsidiary of the Winnipeg based Arctic Glacier Income Fund . subsidiary Arctic Glacier International Inc.
Arctic Glacier International admitted it had engaged in a cartel like “market allocation” scheme, essentially carving up the market with competitors to keep prices high, in Detroit and southeastern Michigan.
In separate charges, three executives of Arctic Glacier International Frank Larson, its former senior vice president of operations, and Keith Corbin and Gary Cooley, both former vice presidents of sales and marketing pleaded guilty to participating in the conspiracy, and promised their co operation with investigators. business, Dallas headquartered Reddy Ice Holdings Inc. and Cincinnati based Home City Ice Co. Home City Ice pleaded guilty to similar charges last year. The Fede lululemon outlet ral Bureau of Investigation has also searched Reddy Ice offices.
A Competition Bureau spokesman declined to comment on the company. No Canadian antitrust allegations have been announced.
But the company has clashed with rivals here. In Alberta, a small ice maker successfully sued Arctic Glacier’s Canadian business for anti competitive practices, including offering a bribe to a customer. An Alberta judge found that Arctic Glacier resorted to “outrageous conduct” to maintain its market dominance.
In 2007, Polar Ice Express Inc., a small Edmonton based ice maker, was awarded $50,000 in damages, plus nearly $100,000 in legal costs, after convincing the court that an Arctic Glacier employee offered a $10,000 bribe to a customer in the cement indus lululemon outlet try. The bribe was offered but not accepted in exchange for an exclusive contract that would have shut out Polar Ice.
The judgment, which was upheld on appeal, also shed light on the pricing power Arctic Glacier had. Before Polar Ice showed up, Arctic Glacier charged the cement company $4.65 for a 12 kilogram bag of ice, plus shipping.
That price stuck Polar Ice owner Jerry Antoniuk as too high. “I couldn’t charge that,” he said. His price: $3.25, shipping included.
Arctic Glacier’s senior executives and board chairman did not respond to interview requests. Department of Justice investigation. Arctic Glacier said it was “unaware of such practices following our acquisition of several companies in Michigan and our entry into that market in 2005.”
Arctic Glacier’s unit price reached nearly $15 in late 2007, before tumbling when allegations against the company surfaced in 2008, and units fell below $1. investigation was triggered not by prices, but by a man who calls himself a whistleblower. Martin McNulty was vice president of sales for Party Time Ice, a Michigan company that Arctic Glacier acquired in 2004, in what was then its biggest acquisition in a continent wide buying spree. From 1996 on, Arctic Glacier bought 77 companies worth nearly $500 million.
In a court filing, Arctic Glacier repeatedly “denies as untrue” Mr. McNulty’s allegations.
But Andrew Morganti, a Michigan based lawyer who is advising a Canadian class action suit against Arctic Glacier and competitors, said “if you look at the geographic markets that these companies handle, it’s quite compelling. It lululemon outlet looks like a puzzle piece,” where businesses would stick to their respective areas. Mr. Morganti has calculated that between 2001 and 2007, wholesale prices of ice in Michigan increased from about 55 to 90 cents a bag, a 64 per cent rise.
In Ontario, Mac’s Convenience Stores Inc., which buys from Arctic Glacier, saw prices for a 2.7 kilogram bag rise by 21.6 per cent between 2002 and 2008; prices for four kilogram bags jumped 37 per cent. Prices for soft drinks, which have a similar cost structure to ice, rose by a smaller amount, said Kim Trowbridge, vice president for the central and western divisions at the company, the biggest convenience store chain owner in Canada.
Packaged ic lululemon outlet e “is a sleeper category that would not be noticed if people were playing games with it,” he said.