Competition – news story

CMA consults on cement price announcement order and release of undertakings

The CMA is consulting on a further draft order to prohibit GB cement suppliers from sending price announcement letters to their customers.

The Competition and Markets Authority (CMA) consulted on the proposed order in September and following changes made as a result of responses received to the first consultation, is now consulting on an amended version.

The order sets out that Great Britain (GB) cement suppliers will be prohibited from sending generic price announcement letters to their customers. Instead, any future price announcement letters will have to be specific and relevant to the customers receiving them, including setting out the last unit price paid, the new unit price, and specific details of other charges that apply to the customer.

The proposed order provides detailed information on how these changes are to be introduced. The CMA published the notice of its intention to make the proposed price announcement order on 11 December 2015 and is inviting comments by 18 December 2015.

The order results from the Competition Commission’s (CC) investigation into aggregates, cement and ready-mix concrete which required Lafarge Tarmac to sell one of its cement plants and Hanson to sell one of its ground granulated blast furnace slag (GGBS) plants to enhance competition in the cement and GGBS markets in GB. The CC also said that it would implement 2 further remedy measures aimed at reducing transparency in the GB cement markets, comprising: (a) a prohibition on generic cement price announcements; and (b) restrictions on the disclosure and publication of GB cement market data.

Following the sale of the cement and GGBS plants on 31 July 2015, which concluded the divestment remedies arising from the CC’s report, the CMA is also intending to release Lafarge Tarmac and Hanson from joint final undertakings relating to the GGBS remedy, although final undertakings offered by Hanson alone remain in place.

The CMA published the notice of its intention to release Lafarge Tarmac and Hanson from joint final undertakings on 11 December 2015 and is inviting comments by 31 December 2015.

The draft order and all other information relating to the investigation can be found on the investigation’s case page.