LONDON: Britain’s competition regulator is to force two of the country’s biggest cement producers to sell off production plants following a two-year investigation which found a lack of competition that had pushed up prices.
The Competition Commission, in its final report on the case yesetrday, said it would require HeidelbergCement’s Hanson to sell off one of three plants to increase competition in ground granulated blast furnace slag (GGBS), a substitute for, and ingredient for cement.
In October, the watchdog had told rival Lafarge Tarmac to sell one of its cement plants in Britain in a bid to introduce a fifth player to that market.
The watchdog criticised current cement market conditions in the country, where Lafarge Tarmac, Cemex and Hanson rank as the three largest producers.
The cement industry globally suffered from the economic downturn that followed the 2008 financial crisis which led to a slowdown in construction.
“Despite falling demand and increasing costs during the last few years, profitability among GB (British) producers has been sustained and their respective markets shares have changed little,” Professor Martin Cave, Deputy Chairman of the Competition Commission, said.
“This is not what you would expect to see in a well-functioning market, under these circumstances.”
The regulator said it believed a lack of competition in the industry has cost customers £30m ($49m) a year, prompting it to rule that greater choice was the only way to bring down prices.
Reuters
