Did you know there’s a packaged ice mafia?
We missed that too. But relax — you can buy your pre-cubed coldness a little cheaper now, thanks to some handy work by the Feds.
FBI: A packaged-ice company, headquartered in St. Paul, Minn., has agreed to plead guilty and to pay a $9 million criminal fine for allocating customers, the Department of Justice announced today. In addition, three of the company’s former executives pleaded guilty for their roles in the conspiracy to allocate customers.
“Customer allocation” is basically squeezing the market, where companies argree with each other to supply certain territories alone, meaning they can ask whatever price they want.
Pretty serious stuff for packaged ice. And this is apparently a trend — these charges stem from an ongoing antitrust investigation by the FBI in Ann Arbor, Indianapolis, Dallas, Cincinnati and Toledo looking into industry practices. As a part of the same investigation, Home City Ice Company pleaded guilty last year for the same thing.
According to the one-count felony charge announced today, Arctic Glacier International engaged in a “conspiracy to suppress and eliminate competition by allocating packaged-ice customers in the Detroit metropolitan area and southeastern Michigan” from 2001 until at least 2007.
Three execs, Frank Larson, Keith Corbin and Gary Cooley, conspired with a packaged-ice competitor to allocate customers in southeastern Michigan and Detroit. They apparently exchanged information with each other to monitor and enforce the agreed customer allocations.
Arctic Glacier has agreed to cooperate with the Feds. “The Board and senior executives in the Company’s head office were committed from the moment we became aware of the investigation to cooperate fully with government officials and ensure that these activities, which remained concealed, ended and those individually responsible identified,” said Keith McMahon, President and CEO of Arctic Glacier said in a statement. “The Company was unaware of such practices following our acquisition of several companies in Michigan and our entry into that market in 2005.”
Turns out Arctic Glacier is a “leading producer, marketer and distributor of high-quality packaged ice” in North America under the brand name of Arctic Glacier Premium Ice. According to the company, it operates 38 production plants and 48 distribution facilities across Canada and the northeast, central and western United States servicing more than 75,000 retail accounts.
Next time you run out to the corner store in the middle of a party, you may know why that ice is so expensive.
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