RPT-UK competition watchdog may force cement makers to sell plants

Tue May 21, 2013 4:02am EDT

LONDON May 21 (Reuters) - Britain's competition regulator may force major cement producers to sell plants as part of efforts to break open the country's cement market, after finding a limited number of players was likely to be causing higher prices.

The Competition Commission (CC) said on Tuesday the cement market was highly concentrated with only four producers - Lafarge Tarmac , Cemex, HeidelbergCement's Hanson and Hope Construction Materials - a situation that had weakened competition and cost British consumers at least 180 million pounds ($274 million) over the 2007-2011 period.

It said, however, that its findings did not mean the companies were explicitly colluding or operating a cartel.

"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 GB (British) producers have still increased," the CC's Deputy Chairman Martin Cave said.

"Our initial assessment is that these problems could have cost GB consumers around 180 million pounds over the period 2007 to 2011, and we also believe this could be an underestimate," he said.

The CC said it was considering measures such as requiring one or more of the top three producers to dispose of some plants or reduce their cement production capacity, creating a cement buying group or restructuring the disclosure of cement market data by the UK government and cement producers.

It will publish its final report by Jan. 17 next year.

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