Lafarge Tarmac fights cement plant sale ruling

Aaron Morby 8 years ago
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Cement and aggregates giant Lafarge Tarmac has launched an appeal against a ruling to force it to hive off one of its five cement works and several ready-mixed concrete plants.

The firm has taken its case the the Competition Appeal Tribunal calling for part of a Competition Commission ruling to be quashed.

This includes its key finding of business procedures having an adverse effect on competition in cement as well as demanding the sale of businesses including either the Cauldron or Tunstead cement works.

In a detailed submission Lafarge Tarmac argues the Commission’s finding were flawed on several counts.

This included the Commission’s failure to disclose critical evidence to the materials giant and what it alleges is insufficient evidence of market co-ordination.

Lafarge Tarmac also argues that the stipulation that the cement business must be sold to a non UK  or fifth supplier would prevent it obtaining a fair value for the works.

Meanwhile, Hope Construction has also launched an appeal that seeks to allow it freedom to buy Lafarge and Tarmac assets that may be placed onto the market.

It argues that as a newcomer to the market dominated by the big four – Aggregate Industries, Cemex, Hanson, Lafarge Tarmac – it should not be barred.

The measures followed a two-year probe that found that both structure and conduct in the cement sector restricted competition by aiding coordination between at the time the three largest producers – Lafarge Tarmac, Cemex and Hanson.

The Competition Commission said these producers have refrained from competing vigorously with each other by focusing on maintaining market stability and their respective shares.

It estimates that higher prices resulting from this lack of competition costs construction at least £30m a year for cement and a further £15-£20m for pulverised fuel ash.

 

 

 

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