Spain probe finds evidence of cement price fixing

Spain probe finds evidence of cement price fixing
Published: 18 December 2009

Spain’s competition watchdog said it would launch deeper probes of five cement makers after an initial investigation found evidence of price fixing.

Spain’s CNC said on Thursday it would start new proceedings against Cementos Portland , Cemex Espana , Cetya, Vresa and Hormigones Beriain after a search of their offices discovered possible anti-competitive practices.

Any company ultimately found guilty could face a penalty of up to 10 percent of their total sales, according to a CNC statement issued in September.

Cementos Portland, an affiliate of builder FCC posted sales of 1.425 billion euros ($2.05 billion) in 2008, although a company spokesman said any penalty would only be enforced against the part of its business under investigation.

The CNC is only investigating Cementos Portland’s concrete, mortar and aggregate business in the Northern Spanish region of Navarre, which represent a very small part of the group’s total sales, the spokesman said.

Cartel investigators from the European Union executive raided a number of makers of cement and related products in Spain in September in conjunction with CNC as part of an ongoing probe. [ID:nLN503808]

In 1994, the European Commission fined cement companies, including France’s Lafarge , for operating a cartel, dividing up cement markets and sharing information.

Separately, members of Spain’s cement association threatened on Thursday to take their plants elsewhere if the government did not provide clearer rules and a more stable regulatory framework. In a press conference prior to news of the watchdog’s probe, cement association Oficemen complained of high electricity bills, little control on imports and little visibility on renewable energy regulation.

"The risk is relocation, that we go to other countries," said Jean Martin-Saint Leon, chairman of the cement association and head of France’s Lafarge in Spain.

The sector has suffered from a construction and property fall-out after a decade-long boom which had made Spain one of the world’s leading producers and consumers of cement.  Cement consumption is expected to fall 32 per cent this year to 29Mt, compared with 56Mt in 2007. Oficemen is predicting a further fall of 10 per cent next year.