The UK Competition Commission (CC) is considering a range of measures to break open the cement market in the country, after finding “serious problems” in both the structure and conduct in the sector that limit competition by aiding co-ordination between the main producers.

An initial CC assessment has revealed that these problems could have cost UK consumers at least UK£180 million (€211 million) between 2007 and 2011.

CC has been conducting an investigation into the supply of aggregates, cement and ready mixed concrete in the UK, and has provisionally concluded that coordination between the three major cement producers – Lafarge Tarmac, Cemex and Hanson (a new entrant) – is likely to be resulting in higher prices for all cement users.

Measures being considered by CC to increase competition in the cement market include requiring the major producers to divest cement and ready-mixed plants. In addition, a cement buying group could be established, while price announcement letters to customers could be prohibited and restrictions could be put on making other information available that could aid co-ordination.

Professor Martin Cave, CC deputy chairman and chairman of the inquiry, said, “We have provisionally found some serious problems with the way the cement market operates in Great Britain.

“In a highly concentrated market where the product doesn’t vary, the established producers know too much about each other’s businesses and have concentrated on retaining their respective market shares rather than competing to the full. Strikingly, despite low demand for cement over recent years, prices and profitability for the producers have still increased.”

He said the four big players in the market are also in a position to increase the already significant barriers that exist for new entrants.

“Our finding does not mean they are explicitly colluding or operating a cartel because there are already several ways of communicating each other’s intentions without the need for specific discussions,” Mr Cave added.

There are five major producers of heavy building materials in the UK – Aggregate Industries, Cemex, Hanson, HCM and Lafarge Tarmac. Hanson is owned by HeidelbergCement, while Holcim owns Aggregate Industries

HCM is a new company established in January 2013 after it bought cement, aggregates and ready mixed concrete assets that the CC had required Anglo American (the owner of Tarmac) and Lafarge to divest following an inquiry into the Anglo American/Lafarge joint venture last year.

Strongly disagree


For its part, Lafarge said it was currently analysing the details of the CC’s preliminary findings, but it refuted the allegations.

“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 said in a statement.

“Lafarge Tarmac has assisted the CC throughout their market investigation, and will continue to do so. Lafarge Tarmac 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.”

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