CCI Slaps Rs. 6,307-Crore Fine on 11 Cement Companies

[msn1270]

The competition regulator has imposed an unprecedented penalty of Rs 6,307 crore on 11 cement companies, including the Indian arms of global leaders Holcim and Lafarge, ruling them guilty of manipulating supplies and prices to deliver huge profits at the cost of consumers and the economy.

The Competition Commission of India (CCI) has asked the cement companies to pay the fine in 90 days, and told the Cement Manufacturers’ Association to stop collecting pricing data and from circulating output and dispatch details to its members.

The order, first reported by ET Now, is expected to hurt the profitability of cement- makers, particularly smaller companies, which may become takeover targets for big players, analysts said. Even if companies litigate, the order had hurt their ability to raise prices in the near future, they said.

The affected companies are:
Jaiprakash Associates, Ultratech, Ambuja, ACC, Lafarge India, Century Textiles, Madras Cements, Grasim Cements (now merged with Ultratech), India Cements, Benani Cement, JK Cement as well as the Cement Manufacturers Association.

“The Commission has 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, vital for the economic development
of the country,” the order said.

The cement-makers denied this and said that they would challenge the order. “We have not indulged in any cartelisation.
We will approach the Competition Appellate Tribunal and challenge the order,” said Mr OP Puranmalka, wholetime
director, UltraTech, and head of Aditya Birla group’s cement business.

Lafarge India’s senior vice-president for corporate affairs, Camille M Gonsalves, said the company had taken note of the CCI decision. “We are reviewing the reports to take suitable action. Lafarge has a strict policy in place to fully comply with competition laws,” Gonsalves
said.Competition law experts said that this is the first instance of the CCI imposing a fine based on the provision
that allows a penalty of a maximum of three times the net profit of a firm.

[sreekbda]

Great News! Cement companies fully deserve it.

Will cement prices correct now?

[parkom]

This should be a good lesson for these illegitimate profit mongers. They have been taking the poor consumer for a ride while stifling construction and growth. We need more of such interventions and timely as is common in the US and Europe to curb such greed and encourage competitive pricing.

[m3_07]

Just a irrational thought - on account of hefty fines imposed the manufacturers decide to transfer cost this to the ever smiling/ supporting customers !!

[Sathyanaryan]

!!! Has any of the companies paid up???