Displaying items by tag: Competition

Croatia: The European Commission has opened an investigation to check whether the proposed acquisition of Cemex Croatia by HeidelbergCement and Schwenk is in line with the European Union (EU) Merger Regulation. The commission has concerns that the proposed takeover may reduce competition for grey cement in Croatia. It will make its decision by 23 February 2017.

"The construction sector, like any other sector, needs competition. As cement is an essential part of the sector we need to make sure that consolidation does not lead to higher prices for construction companies and ultimately consumers in Croatia," said commissioner Margrethe Vestager.

The commission has concerns regarding the supply of grey cement in southern Croatia, including Dalmatia in particular, where Cemex Croatia operates three cement plants in Split and faces competition from DDC's imports from Bosnia and Herzegovina, which is not an EU member. The proposed transaction would combine Cemex Croatia, the largest producer in the area, and DDC, the largest importer. The commission's initial investigation indicates that the proposed transaction may remove a significant competitor from an already concentrated regional market.

The remaining actual or potential suppliers may exercise only limited competitive pressure on the merged entity because of the transport costs to reach southern Croatia. Additionally, the domestic cement suppliers Cemex Croatia and LafargeHolcim control all the cement terminals in ports along the Croatian coast. The commission has preliminary concerns that the transaction may strengthen the market power of Cemex Croatia in southern Croatia and result in price increases for grey cement.

HeidelbergCement and Schwenk plan to acquire, via their joint subsidiary DDC, assets in Croatia and Hungary that currently belonging to Cemex. The Hungarian part of the transaction as been referred to the Hungarian competition authority, so the commission's investigation will focuses on the acquisition of Cemex's Croatian assets.

Italy: The Italian Competition Authority (AGCM) has decided to extend its investigation of the Italian Cement Association (AITEC) and cement producers including Italcementi, Colacem and Sacci. The AGCM has been looking into alleged coordinated increased in cement prices over the past six months. The regulator has now extended its inquiries until May 2017 due to ‘suspicious’ behaviour. The inspections have revealed that simultaneous price rises and similar sales prices communicated to customers in advance has been in practice by the companies being investigated and other players in the sector.

Europe: The European Court of Justice has annulled a request for information by the European Commission into several cement producers in a cartel probe. The judgement could restrict the competition watchdog's investigative powers, according to reporting by the Wall Street Journal.

The commission opened an antitrust investigation in late 2010 looking at the activities of Cemex, Holcim, Lafarge, HeidelbergCement and others. Originally the cement companies were suspected by the commission of colluding with rivals to fix prices and share markets in Austria, Belgium, the Czech Republic, France, Germany, Italy, Luxembourg, the Netherlands, Spain and the UK. However, the investigation was closed in mid-2015 due to insufficient evidence. Since then the cement producers have challenged the commission’s right to ask for the level of detail they requested. The ruling overturns a 2014 decision by the EU's General Court, which said the commission questionnaires were justified.

Ireland: Gardaí (Ireland's police force) and officials from the Competition and Consumer Protection Commission (CCPC) raided Irish Cement's offices last week in an investigation into the Euro50m bagged-cement industry. According to local media, the inquiry is focused on charges of abuse of a dominant position, which is an offence under both Irish and European law.

The alleged offence involves a business using a powerful position in a particular market to force out rivals or put them out of business. It often involves predatory pricing, namely cutting charges for products or services to a point where others cannot compete. Irish Cement is one of the largest players in the market.

"Irish Cement fully facilitated the inspection and is continuing to cooperate with the CCPC. Inspections regarding competition policies, procedures and practices are an accepted part of the business environment around the world," said Irish Cement in a statement. The company added that it operated to the highest standard and was confident that it had no issues in relation to competition.

Colombia: Colombia's Superintendent of Industry and Commerce (SIC) is expected to issue a final ruling on its on-going competition investigation into the local cement industry. SIC intends to announce its findings by the middle of 2015 according to comments SIC head Pablo Felipe Robledo del Castillo made to local press. Meanwhile, Robledo also said he plans to present a bill on 16 March 2015 that would strengthen the sanctions for anticompetitive practices in Colombia.

"This rule will allow us to increase the sanctions above the nominal amount of US$25m, the current maximum, by adding percentages of a company's revenues or equity, in order to bolster the penalties," said Robledo.

SIC announced in late 2013 that it was investigating whether executives at Colombian cement companies had colluded to inflate cement prices in country since as early as 2010. The investigation targeted 14 current and former top directors at five firms, including Cementos Argos, Cemex and Holcim.

South Africa: The Competition Commission of South Africa has referred Natal Portland Cement (NPC) to the Competition Tribunal. The referral follows the Commission's investigation, between 2008 and 2012, of collusive conduct in the cement cartel against the four main cement producers, NPC, Pretoria Portland Cement Company Limited (PPC), Lafarge Industries South Africa (Lafarge) and AfriSam Consortium (Pty) Ltd (AfriSam).

PPC was granted conditional leniency in terms of the corporate leniency policy of the Commission. AfriSam settled with the Commission and agreed to pay an administrative penalty of US$11.2m representing 3% of its annual turnover in 2010. Lafarge also settled with the Commission and agreed to pay an administrative penalty of US$13m representing 6% of its annual turnover in 2010.

The investigation found that the four cement producers agreed to collude and to divide the cement market by allocating market shares and indirectly fixing the price of cement during a legal cartel in South Africa that ended in 1996. The Competition Commission allege that they subsequently reinforced these collusive arrangements through a series of other agreements, which NPC's representatives were party to, including an agreement to progressively exchange competitively sensitive sales data through the Concrete and Cement Institute of South Africa.

The Commission is pursuing a maximum penalty of 10% of NPC's annual turnover and a Tribunal order that NPC contravened the Competition Act.

Russia: The Federal Antimonopoly Service (FAS) has found that the 'Stroiindoustria' Bakhchisaray cement plant in the Crimea violated antimonopoly law by 'unreasonably' raising prices of cement. In April – May 2014 Bakhchisaray increased prices for its different product brands by an average of 45%. FAS established that the company had the dominant position on the cement market in the Crimea Federal District.

Completing the investigation, the antimonopoly body did not reveal any economic, technological or other justifications for the increased prices of the company products. The case against Bakhchisaray was initiated following an inspection of the largest producers of construction materials in the Crimea Federal District to verify whether prices complied with the antimonopoly law.

US: Martin Marietta Materials' US$2.7bn purchase of Texas Industries has been approved by the US Justice Department under a settlement that requires asset sales. Martin Marietta will sell rail yards in Texas and a quarry in Oklahoma to maintain competition in the market for gravel, sand and crushed stone.

"Without the divestiture obtained by the antitrust division, customers would have likely faced higher prices as a result of this acquisition," said Bill Baer of the US Justice Department.

Colombia: Colombia's Superintendent of Industry and Commerce (SIC) has launched an investigation into possible anti-competitive behaviour within the cement industry. According to the regulator, the investigation relates to alleged 'sustained and unjustified increases in the price of cement since January 2010.'

In 2008 the regulator issued fines in excess of US$1m to cement firms for involvement in a market sharing agreement. Cementos Argos has denied involvement in price fixing or market sharing.