Thursday 18 December 2014

Watchdog orders Lafarge to sell UK cement plant

Published 15/01/2014 | 02:30

CRH...Business Ireland: Repro Free. Tuesday 20th August 2013. Pictured at CRH Interim Results 2013 at the Shelbourne Hotel were Albert Manifold, CEO Designate with Myles Lee, CEO. Picture Jason Clarke Photography.
Albert Manifold

THE UK's Competition Commission has ordered CRH rival Lafarge to sell a cement plant in Britain to facilitate the entry of a new competitor into the market.

The watchdog has also told Hanson, which is owned by Heidelberg Cement, that it must sell one of its facilities in the UK that produces ground granulated blast furnace slag -- a partial substitute for and input into cement.

CRH has previously said it would be interested in buying cement plants in the UK if they came up for sale.

Following a two-year probe, the Commission is also imposing restrictions on the publication of British cement market data in an effort to limit the flow of information and data concerning cement production.

General price announcements will also no longer be permissible.

Instead, customers will have to be informed of price changes specific to them.

The Competition Commission focused its probe on Lafarge Tarmac, Cemex and Hanson. CRH does not manufacture cement in the UK, but does control a number of cement import terminals there.

Irish firm Eircem, headed by managing director Peter Goode, told the watchdog last year that the British cement market was so anti-competitive that it defied logic.

"We believe that the entry of a new, independent cement producer is the only way to disturb the established structure and behaviour in this market which has persisted for a number of years and led to higher prices for customers", said Martin Cave, deputy chairman at the Competition Commission and chairman of the inquiry group.

He said that despite falling demand and increasing costs during the last few years, profitability amongst British producers has been sustained and their respective market shares have "changed little".

"This is not what you would expect to see in a well-functioning market, under these circumstances," he said.

The competition tsar reckons that higher prices resulting from this lack of competition have cost customers at least £30m (€36m) a year above the odds for cement.

Irish Independent

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