UK: Commission orders Lafarge Tarmac sell-off to boost competition in cement market

Lafarge Tarmac faces the forced sale of part of its cement and ready mix concrete businesses.

Lafarge Tarmac faces the forced sale of part of its cement and ready mix concrete businesses. - Credit: Archant

A new player is to be given a foothold in the cement market as part of a package of remedies being proposed to boost competition.

The Competition Commission wants Lafarge Tarmac to sell one of its cement plants ? either Tunstead in Derbyshire or Cauldon in Staffordshire ? and some of its ready mix concrete sites to create a new independent UK producer.

It is concerned that the way the cement sector operates aids coordination between three major players ? Lafarge Tarmac, Cemex and Hanson ? and is likely to result in higher prices.

However, yesterday’s recommendations are provisional and subject to consultation.

Commission deputy chairman Professor Martin Cave said: “We think that these measures will go a long way towards establishing a more competitive market for customers.

“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.”

The watchdog also wants to limit the flow of information between producers, such as price announcement letters and industry data.

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Mr Cave added: “For a long time, these channels have given producers too much awareness of how their counterparts are performing and their future pricing strategy.”

In May, the commission said there were serious problems in the way market operated, which it estimated could have cost customers around £180million between 2007 and 2011, although it acknowledged there was no explicit collusion.