The Colombian government Wednesday will start investigating three top cement suppliers suspected of collusion to fix prices.

"The Colombian government saw an unusual and strange reduction of, and increase in prices, of cement. We will open a formal investigation tomorrow and this could end up in sanctions," Trade and Industry Minister Jorge Humberto Botero told reporters.

Senator Hugo Serrano recently said in Congress that the three main cement makers in Colombia, local group Cementos Argos SA , Mexico’s Cemex SA and Swiss company Holcim Ltd  simultaneously cut cement prices by 40% last year to harm small local producers. Subsequently, Argos bought a smaller producer, taking advantage of the latter’s difficult financial situation.

In November, Cemento Argos agreed to pay $192m for Colombian-based Cementos Andinos and its related concrete producer, Concrecem.

After the consolidation, the three companies raised cement prices by 50 per cent between November last year and January, Serrano said.

Botero added the government is considering price controls on cement.

Jose Alberto Velez, president of Argos, didn’t return a phone call to seek comment. No official at Holcim and Cemex were immediately available for comment.