In a report on grounds maintenance contracts in London the ALA found the major firms in the market rarely submitted seriously competitive tenders against each other.
It concluded there was serious competition between the major firms active in the market in only four contracts out of 58 studied.
The ALA has asked the Office of Fair Trading to investigate.
'Weak markets and the lack of serious competition create the conditions in which semi monopoly conditions might develop and collusion between firms could take place', said ALA Chair Toby Harris at the launch of the report, Grounds for concern.
The association says its analysis does not prove collusion is taking place between firms but highlights some 'worrying signs'.