Mid-tier accountancy firms are being deliberately driven off by rapacious tactics from the Big 4, the managing director of BDO Stoy Hayward has alleged.
Jeremy Newman wrote in his blog that his firm had recently lost a contract when a Big 4 firm cut its original fees by two-thirds.
After originally pitching at over £600,000, the firm cut their fees to £220,000, Mr Newman recounted. BDO originally made a pitch at £200,000, but lost the contract, he claimed.
Mr Newman wrote: "Maybe, just maybe, this is 'unfair' competition.
"Maybe, just maybe, this is 'predatory' pricing designed to force us out of competing in this sector of the market place."
Though he will not refer this specific instance to the Competition Commission, Mr Newman added that he wanted to expose details of the incident in order to provoke discussion.
No lack of competition found
The recently concluded Oxera review found that there is not a significant lack of competition in the sector.
Commissioned by the Office of Fair Trading, the review was designed to look for negative impacts of the Financial Services and Markets Act 2000 on competition.
Recently, the chairman of KPMG Europe said that he would welcome other accountancy firms establishing themselves in the UK to the extent that the Big 4 has.
But the dominance of Ernst & Young, Deloitte, PricewaterhouseCoopers and KPMG is not necessarily a bad thing, John Griffiths-Jones told the Scotsman.
Of the companies that make up the FTSE 350 index, 98 per cent use one of the Big 4 to do their accounting.
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