Watchdog tells Lafarge Tarmac to sell off plant

BRITAIN’S monopoly regulator yesterday said it wanted to boost competition in the cement industry by requiring Lafarge Tarmac, one of the major players, to sell a cement plant to a new entrant in the market.

“The best way to disturb the balance of a market where producers have focused on retaining their respective market shares rather than competing is to create the opportunity for a major new entrant,” said Martin Cave, deputy chairman of the Competition Commission (CC).

The CC also said that it planned to limit the flow of information between existing producers and would order the sale of certain facilities used in the production of a cement substitute.

Lafarge Tarmac yesterday spoke out against the regulator’s proposals. “We’re disappointed with the Commission’s provisional decision on remedies,” a spokesperson told City A.M. “The Commission’s assumptions and reasoning have serious flaws and the biggest loser in this process will be the customer.

“There is strong evidence to demonstrate there is effective competition in the sector – with new players having recently entered the marketplace. The CC should take these factors on board for its final report.”

The regulator’s latest proposals are part of its months-long investigation into Britain’s cement industry, which found in May that a lack of competition was costing customers hundreds of millions of pounds.

The body said then it could force the dominant players, which include Cemex, HeidelbergCement’s Hanson and Hope Construction Materials as well as Lafarge Tarmac, to sell off some of their plants.

“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,” said Cave.

Before publishing its final decisions, the CC will wait for responses to its proposals.