Cement firms dispute provisional findings of CC
Major UK cement producers strongly disagree with preliminary findings of market investigation
THE Competition Commission (CC), in a summary of its provisional findings in its market investigation into the supply of aggregates, cement and ready-mixed concrete in Great Britain, published on 21 May, has concluded that co-ordination between three major cement producers – Lafarge Tarmac, CEMEX and Hanson – is likely to be resulting in higher prices for all cement users.
Although stating that its findings do not relate to explicit collusion between these producers, the CC has said it is now looking at a wide range of possible remedies to increase competition in the cement market. No problems were identified in the markets for aggregates and ready-mixed concrete.
In response to the CC’s provisional findings on the cement market, Lafarge Tarmac said: ‘We note the preliminary findings of the Competition Commission’s market investigation, and are currently analysing the details.
‘We strongly disagree with the Commission’s provisional findings and proposed remedies, and will be making strong representations to the Commission during the next phase of the process.
‘Lafarge Tarmac have assisted the Commission throughout its market investigation and will continue to do so.
‘The company has a strong commitment to conduct all business dealings in an ethical, fair and legally compliant manner.
‘We believe there is effective competition in the sector, which continues to be critical to the UK economy.’
CEMEX UK said they strongly disagreed with the provisional finding that ‘the cement market is likely to result in higher prices for all cement users’.
A spokesperson for the company said: ‘The cost of capital for cement production far exceeds the returns, particularly in a declining market as there was over the period under investigation.
‘We believe that competition between domestic UK cement producers is strong and robust, and allows entry into the market. In CEMEX UK’s view, the suggested possible remedies are wholly disproportionate.
‘We look forward to reviewing the full provisional report due to be issued shortly and working with the Competition Commission to ensure that any remedies are in the interests of the consumer and there is a UK building material market in the future.’
David Weeks, communications and PR manager with Hanson UK, said: ‘We are looking carefully at the Competition Commission’s provisional findings into the economics of the British cement market and will respond in due course.
‘We have been co-operating fully with the Commission throughout this investigation and will continue to do so as it works towards confirming its views later this year.’
He continued: ‘It is important to note that the study covers the economics of the cement industry as a whole, and is not specific to Hanson. Nor is it an investigation into any form of wrong-doing or infringements of competition regulation.’