Competition Market Authority consults on draft cement price announcement order

The Competition Market Authority (CMA) has published a draft order which would prohibit cement suppliers in Great Britain from sending generic price announcement letters to their customers.

In January 2014, the Competition Commission (CC) published its final market investigation report 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 Great Britain (GB).

The CC also said that it would implement two 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 now consulting on its draft price announcement order.
The order sets out that 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 any other fees and charges that apply to the customer.

The draft order provides detailed information on how these changes are to be introduced. The CMA is inviting comments on the draft until Friday 9 October 2015.

The CMA is also considering the final remaining remedy measure (concerning restrictions on the disclosure and publication of cement market data) and is intending to consult on this during

October/November with the aim of completing all aspects of the package of remedies by the end of 2015.

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