Builders petition CCI, accuse cement firms of cartelising

Builders petition CCI, accuse cement firms of cartelising
Published: 09 August 2010

Builders have moved the Competition Commission alleging that cement firms, including Aditya Birla group firm Grasim, ACC, Gujarat Ambuja and others, have formed a price cartel and it is costing them dearly.

Through their apex association, builders have formed a united front against major cement manufacturers, accusing them of forming a cartel and hiking rates of the building material artificially.

The Builders Association of India (BAI) has alleged before the CCI that the Cement Manufacturers Association and 11 of its members have indulged in forming arrangements, directly or indirectly, to fix the selling price of cement.

"It is most relevant to point out that besides indulging in an act of cartelisation, few of the above mentioned respondents have acquired a dominant position as defined under Section 4 of the Competition Act," the BAI said in its complaint.
According to the complaint, the cement price of around Rs 231 per bag during the January-March period in Delhi increased to Rs 238 per bag between April and June. In Mumbai, the price rose from Rs 267 to Rs 273 during the comparable periods, while in Kolkata, cement prices rose from Rs 216 in January-March to Rs 233 per bag in April-June.

However, Grasim Wholetime Director Adesh Gupta said, "There is not cartelisation, otherwise prices would have not fallen down like this."

The Cement Manufacturers’ Association also refuted the allegations.

"Prices are coming down everyday. They are coming down for the last three-four months. So how come the question of cartelisation arises? There is absolutely no truth in this. Prices are below the cost of production now," said H M Bangur, a former president of the cement lobby.

Source: Economic Times