Cumbrian firm Thomas Armstrong could face fines totalling almost £2.2 million for being involved in illegal cartel activity with two other firms.

Thomas Armstrong (Timber) Ltd, part of the Thomas Armstrong Group, is awaiting two fines after an investigation by a Government watchdog.

The Competition and Markets Authority found the Flimby firm breached competition rules.

The offences related to the supply of drawer parts to furniture manufacturers such as Silentnight.

The authority said the companies broke competition law by agreeing not to compete on price and sharing out which customers they would supply.

This reduced customer choice and gave the appearance of competition where there was none, it said.

Investigations were prompted by a call to the authority’s cartels hotline.

In one case, dubbed the drawer fronts cartel, the Flimby firm and Essex company Hoffman Thornwood Ltd admitted market sharing, co-ordinating prices, bid rigging and exchanging commercially-sensitive information.

This related to the supply of chipboard and MDF-based drawer fronts to the UK bed industry between July 2006 and September 2008, and between at least September and October 2011.

The second case, dubbed the drawer wraps cartel, saw Thomas Armstrong (Timber) Ltd breach competition rules with County Durham firm BHK (UK).

That concerned the supply of drawer sides and backs to the UK bed, office and domestic furniture industry between April 2006 and September 2008.

All three companies admitted breaking competition law. Thomas Armstrong (Timber) Ltd and parent company Thomas Armstrong (Holdings) Ltd agreed to pay a maximum penalty of £1,509,000 for its part in the drawer wraps cartel and a maximum penalty of £684,000 in relation to the drawer fronts cartel.

Those figures include a 20 per cent reduction for admitting the breaches and co-operating with the investigation.

Hoffman Thornwood Ltd and its parent company Consolidated Timber Holdings Ltd agreed to pay a maximum of £688,000, which also included a 20 per cent reduction.

The authority has not yet issued a formal infringement decision, which will finalise the fines and set out its findings in full.

The companies will not have to pay any penalties until that is issued, which is expected to happen in the coming weeks.

BHK (UK) Ltd confessed its involvement in cartel activity shortly after the start of the investigation and will not be fined.

The case began as a criminal investigation into suspected offences under the Enterprise Act 2002. Following investigation, no charges were brought and the authority closed the criminal case in September 2015.

The civil case, under which the fines will be levied, began in March 2016.

Stephen Blake, CMA senior director for cartels, said: “When competitors collude like this, they do so at the expense of customers, increasing prices, and reducing quality and choice. In this case, the collusion concerned products which are found in furniture in homes and offices across the UK.

“This settlement demonstrates the CMA’s determination to pursue those who take part in anticompetitive behaviour, which is harmful to consumers, businesses and the wider economy.”

The Competition Act 1998 prohibits agreements, practices and conduct that may damage competition in the UK.

This includes agreements or practices between businesses that prevent, restrict or distort competition.

Any business found to have infringed the act can be fined up to 10 per cent of its annual worldwide group turnover.

Thomas Armstrong (Holdings) Ltd and Thomas Armstrong (Timber) Ltd declined to comment.