Cade likely to impose fine on Brazil producers

Cade likely to impose fine on Brazil producers
24 January 2014

Brazil's antitrust watchdog Cade is likely to impose fines totalling BRL3.1bn (US$1.3bn) on six cement producers for alleged market collusion.

Late Wednesday, four of five members of the board of Brazil's Administrative Council for Economic Defense, or Cade, voted for the penalties, while the remaining member requested a review of the process. Under the regulator's rules, during the review period Cade members can change their votes. Cade didn't offer a timetable for a final decision.

According to the current proposal, Brazil's Votorantim Cimentos would be fined BRL1.56bn and Holcim Ltd would receive a penalty of BRL508.5m. Also, Itabira Agro Industrial would be fined BRL411.6m, Cimpor Cimentos do Brasil would receive a penalty of BRL297.8m and InterCement do Brasil, a subsidiary of Camargo Correa group, would be fined BRL241.7m. In addition, Itambe would receive a fine of BRL88m. A report by Reuters said that producers would also be forced to shed capacity with Votorantim having to dispose of 35 per cent, Intercement 25 per cent and Holcim 22 per cent.

Cade said the alleged cement cartel – which existed from 1986 to 2007, according to the regulator's investigation – led to increased prices passed on to consumers.

The companies, which together dominate almost 90 per cent of Brazil's cement and concrete market, will contest the decision. Holcim said in a statement that "it acts accordingly with the law and practices free competition in each and every market where it is present."

Published under Cement News

Tagged Under: Pricing Cade Brazil Cartel