THE Competition Commission (CC) said a proposed joint venture between Anglo American and Lafarge in Britain could damage competition for construction materials in some markets.
Having struggled for more than three years to find a buyer for its Tarmac UK unit, which it bought as part of the larger Tarmac group in 2000, Anglo last year agreed to merge Tarmac UK with Lafarge’s own UK cement, aggregates, concrete and asphalt businesses in a 50-50 joint venture.
However, the CC yesterday said the venture could lead to a substantial lessening of competition for the supply of materials including bulk cement, rail ballast and asphalt in certain markets.
The commission said it was now consulting on the possible actions it could take in response, which could include a forced sale of some or all of the business.
It said it would publish a list of possible remedies, outlining the way that anti-competitive effects of the joint venture could be prevented, and would accept comments by 13 March.
“In bulk cement there are currently only four UK producers, and there is evidence that the market is not as competitive as it could be,” the CC said.
“Prices and profit margins haven’t been affected in the way we would have expected following the big falls in the demand for cement in the past few years.
“We are concerned that the proposed tie-up would increase the susceptibility of this market to coordination.”