Cement works sell-offs sought to improve the mix

The Competition Commission is looking to crack open the cement market by forcing the biggest three makers in the UK to sell off production facilities.

In provisional findings released yesterday, the inquiry's chairman, Martin Cave, found that with so much of the UK market concentrated in so few hands, cement prices had increased by £36m a year. Mr Cave said this was almost certainly an underestimate, which means yet more financial pressure has been heaped on a construction industry that is "not flourishing".

Although Hanson UK, Cemex and Lafarge Tarmac were not accused of any wrongdoing, the commission's key suggestion is to force one or more of them to offload cement works. The hope is that this will encourage new players into the market.

Any sales would hurt the producers. Lafarge Tarmac, which with four sites has the most plants in the UK, yesterday "strongly disagreed" with the commission's findings. "We believe there is effective competition in the sector, which continues to be critical to the UK economy," it said.

Lafarge's tie-up with Tarmac only started trading this year after meeting the commission's conditions for the merger. A spokesman for Hanson said that the company was "looking carefully" at the provisional findings of the investigation, which is expected to end in December.

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