Cement firms face action over 'failure to compete' on pricing
Tuesday 21 May 2013
Britain's major cement firms were today facing "hard-hitting" action after a regulator accused them of failing to compete on pricing.
The Competition Commission said there were serious problems in the way the cement market operates in the UK, with customers facing higher prices because the producers know too much about each other's businesses.
It estimated that this behaviour could have cost consumers around £180 million between 2007 and 2011, adding that it was looking at a wide range of remedies to increase competition.
Commission deputy chairman Martin Cave said the three major players, Lafarge Tarmac, Cemex and Hanson, have concentrated on retaining their respective market shares rather than competing to the full.
He added: "Strikingly, despite low demand for cement over recent years, prices and profitability for the British producers have still increased."
The watchdog said there was no explicit collusion between the firms; rather, there were conditions which allow them to coordinate their behaviour.
Mr Cave said: "Established information channels such as price announcement letters can signal their plans, and tit-for-tat behaviour and cross-sales can be used to prevent or retaliate against any moves to disturb the overall balance between the different players in this market.
"They have also been in a position to increase the already significant barriers that exist for new entrants."
Possible remedies could include requiring the firms to divest of cement plants as well as prohibiting generalised price announcement letters.
Mr Cave added: "Given the extent of the problems we have found, we feel that hard-hitting measures may be necessary to open up the cement market to greater competition by transforming existing structures and behaviour."
- 1 Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
- 2 Margaret Thatcher 'expressed fears of Asian rising' at Anglo-Irish summit in 1984
- 3 Sussex couple die in suspected Christmas Day 'suicide pact'
- 4 The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
- 5 The Unluckiest People of the Year 2014 (and one very unlucky giraffe)
Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
UK weather: Warning for more snow and ice as freezing temperatures and gales hit Britain
UK weather: Travel chaos continues as King's Cross train delays add to snow on roads
The Unluckiest People of the Year 2014 (and one very unlucky giraffe)
North Korea calls Barack Obama 'a monkey' in latest attack as 'The Interview' row festers
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
Immigrants make UK racist, says Ukip councillor Trevor Shonk
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Katie Hopkins speaks out on childhood obesity: 'Parents of fat children should be prosecuted for child cruelty'
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...