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Watchdog targets cement break-up.

A NEW player is to be given a foothold in the cement market as part of a package of remedies being proposed to boost competition.

The Competition Commission wants Lafarge Tarmac to sell one of its cement plants as well as offer some of its ready mix concrete sites, in order to create a new independent producer in the UK.

It is concerned that the way the cement sector operates aids co-ordination between three major players - Lafarge Tarmac, Cemex and Hanson - and is likely to result in higher prices for customers.

Commission deputy chairman Professor Martin Cave said: "We think that these measures will go a long way towards establishing a more competitive market for customers.

"The fundamental importance of cement to the construction and building sectors and the amount of such work that is funded by the public purse only underlines the need for these actions."

The watchdog also wants to limit the flow of information between producers, such as price announcement letters and industry data.

Mr Cave said: "For a long time, these channels have given producers too much awareness of how their counterparts are performing and their future pricing strategy."

Yesterday's recommendations are provisional and subject to consultation. In May, the watchdog said there were serious problems in the way the market operated but said there was no explicit collusion.

It estimated that the behaviour could have cost consumers around PS180m between 2007 and 2011.

Lafarge Tarmac will be required to divest either of its cement plants at Tunstead in Derbyshire or Cauldon in Staffordshire, with the purchaser also able to acquire some of its ready mix concrete plants.

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Title Annotation:Business
Publication:Western Mail (Cardiff, Wales)
Date:Oct 9, 2013
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