Antitrust proceedings start against cement cartel

By Helen Wright10 December 2010

The European Commission (EC) has launched antitrust proceedings against seven cement manufacturers active in member states.

Cemex, Holcim and Heidelberg have so far confirmed that they are under investigation, while reports have cited Lafarge and Dyckerhoff as among those suspected by the EC of colluding with rivals in order to fix prices in Austria, Belgium, the Czech Republic, France, Germany, Italy, Luxembourg, The Netherlands, Spain and the UK.

After an initial investigation which began in November 2008, the EC said the formal proceedings were launched over suspicions that the companies acted to restrict trade flows in the European Economic Area, including organising import and export restrictions.

The alleged cartel is said to have colluded in market sharing and price fixing in the markets for cement and cement-based materials such as ready-mix concrete, clinker, aggregates, blast-furnace slag, granulated blast-furnace slag, ground granulated blast-furnace slag and fly ash.

"The preliminary assessment has shown that the Commission should pursue this investigation as a matter of priority," the EC said, adding that the initiation of proceedings does not imply that it has conclusive proof of infringements.

The EC declined to name the companies it is investigating.

Cemex said that it had received notification of the EC's formal proceedings, adding that it had co-operated with the investigation and plans to defend its position "vigorously".

Holcim confirmed that it had also been notified of the EC proceedings, but said it would not comment on ongoing investigations.

Heidelberg also confirmed receipt of the notice of formal proceedings from the EC pursuant to the 2008 investigation, commenting "no concrete allegations have been mentioned so far".

"Heidelberg Cement has transmitted information to the Commission on request. [The company's] own investigations together with external law firms did not confirm the suspected infringements. As such, Heidelberg assumes that the company can rebut the suspicions," Heidelberg said.

Lafarge and Dyckerhoff could not be reached for comment.

There is no legal deadline for the Commission to complete the investigation.

This is not the first time that the markets for cement and other building materials have been scrutinised by the EC and other national competition authorities.

In 1994 the EC fined a European-wide cement cartel - which included Lafarge - for price fixing, while German authorities in 2003 fined cement companies € 600 million for cartel activity.

Most recently, in December last year Poland's competition authority handed down maximum fines totalling € 99 million to seven cement manufacturers accused of price fixing.

Two cartels were in place for 11 years up to the end of 2006 covering the entire national market.

OCCP levied the fines against Grupa Ozarow, Cemex, Dyckerhoff, Cementownia Warta and Cementownia Odra after fellow cartel members Lafarge and Gorazdze Cement blew the whistle.

Meanwhile, last December also saw Spain's National Competition Commission (CNC) launch proceedings against five cement manufacturers suspected of anti-competitive practices, following raids carried out on their offices.

The five companies involved in this investigation are Cementos Portland (a subsidiary of contractor FCC), Cemex Espana, Cetya, Vresa and Hormigones Beriain.

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