Price of Ice is Nice...And Fixed?

When American citizens wonder about what the federal government has been up to, what with the Iraq war, the war on terrorism, undocumented immigrants crossing borders on a daily basis, and the fuel price crisis, they can sleep well tonight knowing that the FBI has been hot on the trail of possible collusion in the ice business.

You've read that correctly-the ice business. A former vice president of sales for the company Party Time Ice, Martin McNulty, spilled the beans to the FBI about the major ice companies discussing among themselves exactly what areas of the country they would service and what the price should be for bagged ice.

I was just saying to myself the other day, "If the prices on bagged ice stay like they are, I might have to drink warm tea."

The packaged ice business is no small deal; combined, it is a $1.8 billion annually industry. That would seem to be the equivalent of a fair-sized iceberg, metaphorically speaking.

This investigation has been ongoing for over three years, with wire-tapping aiding in the process of uncovering the frozen water sinister doings.

Three of the major ice providers in the United States; Home City Ice Co of Cincinnati, Reddy Ice Holdings Inc of Dallas, Texas, and Arctic Glacier Inc of Winnipeg, Manitoba are thought to have worked together to keep prices artificially high and to squeeze out competitors.

Charges against Home City Ice Co that they worked for six years to keep the Detroit market to themselves were unsealed in June, 2008. Apparently, this was true as the company plead guilty and may pay as much as $100 million in fines.

Reddy Ice Holdings Inc and Arctic Glacier Inc have not had charges filed against them. Reddy Ice stated in March that the FBI had searched its offices; Arctic Glacier stated it had been served with a subpoena. Both companies state they are cooperating with the investigation.

Home City, which received a plea agreement for its guilty plea, is also cooperating with investigators.

While collusion is never a small deal, it would seem there are other industries much larger than the packaged ice industry which just may be talking among themselves to keep prices high and to keep competition-such as the small, local companies which can't compete with nationwide companies. I'd like to see strides made by the federal government in these other areas as well.

Sources: "The Ice Caper: U.S. Authorities Expand Price-Fixing Probe" http://www.financialpost.com/story.html?id=707141

"Ice Firms Eyed Over Alleged Price-Fixing" http://money.aol.com/news/articles/_a/bbdp/ice-firms-eyed-over-alleged-price-fixing/122471