Taming cement cartels easier said than done

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Follow us:WhatsappFacebookTwitterTelegram.cls-1{fill:#4d4d4d;}.cls-2{fill:#fff;}Google NewsIn June this year, the Competition Commission of India (CCI) found cement manufacturers in violation of the provisions of the Competition Act, 2002, which deals with anti-competitive agreements, including cartels.It determined that some of the cement majors manufactured way below their capacity to reduce supply and raise prices.The CCI slapped a penalty of `6,307 crore on 11 leading cement firms for colluding to fleece the consumer and gave them 90 days to pay the amount. The order was passed after investigation carried out by the director general upon information filed by the Builders Association of India.The CCI also imposed penalty on the Cement Manufacturers Association. Those accused of cartelisation include ACC, Ambuja Cements, Ultratech Cements, Grasim Cements now merged with Ultratech Cements, JK Cements, India Cements, Madras Cements, Century Cements, Binani Cements, Lafarge India and Jaypee Cements.The CCI also observed that the act of these cement companies in limiting and controlling supplies in the market and determining prices through an anti-competitive agreement is not only detrimental to the cause of the consumers but also to the whole economy since cement is a crucial input in the construction and infrastructure industry and is vital for the economic development of the country.The companies contested the findings and filed an appeal before the Competition Appellate Tribunal (CAT). Last heard, the CAT served notices on the CCI and the Builders Association of India seeking their response in the matter. The stage appears set for a big battle.first published:September 17, 2012, 09:08 ISTlast updated:September 17, 2012, 09:08 IST
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In June this year, the Competition Commission of India (CCI) found cement manufacturers in violation of the provisions of the Competition Act, 2002, which deals with anti-competitive agreements, including cartels.

It determined that some of the cement majors manufactured way below their capacity to reduce supply and raise prices.

The CCI slapped a penalty of `6,307 crore on 11 leading cement firms for colluding to fleece the consumer and gave them 90 days to pay the amount. The order was passed after investigation carried out by the director general upon information filed by the Builders Association of India.

The CCI also imposed penalty on the Cement Manufacturers Association. Those accused of cartelisation include ACC, Ambuja Cements, Ultratech Cements, Grasim Cements now merged with Ultratech Cements, JK Cements, India Cements, Madras Cements, Century Cements, Binani Cements, Lafarge India and Jaypee Cements.

The CCI also observed that the act of these cement companies in limiting and controlling supplies in the market and determining prices through an anti-competitive agreement is not only detrimental to the cause of the consumers but also to the whole economy since cement is a crucial input in the construction and infrastructure industry and is vital for the economic development of the country.

The companies contested the findings and filed an appeal before the Competition Appellate Tribunal (CAT). Last heard, the CAT served notices on the CCI and the Builders Association of India seeking their response in the matter. The stage appears set for a big battle.