India’s competition authority has levied large fines for alleged anti-competitive practices on 11 cement producers, including the local subsidiaries of leading international groups.
Holcim of Switzerland, the world’s biggest cement maker by sales, said after the market closed that ACC and Ambuja Cements (ACL), its two Indian subsidiaries, had together been fined almost SFr400m ($419m).
The total fines, equivalent to about $1.1bn, include the local subsidiary of France’s Lafarge, as well as Indian-owned companies Ultratech and Grasim – now merged to become the market leader – JK Cements, India Cements and others.
“The Commission has considered the parallel and co-ordinated behaviour of cement companies on price, dispatch and supplies in the market,” the Competition Commission of India (CCI) said. “The Commission has found that the cement companies have not utilised the available capacity so as to reduce supplies and raise prices in times of higher demand,” it added. The companies concerned have been given 90 days to pay.
Holcim, which owns 50.3 per cent of both ACC and ACL and has management control, said that its two subsidiaries would appeal against the decision.
“ACC and ACL contest the allegations and findings against them in the CCI’s order and will pursue all available legal steps to defend their respective position”, the group said. A Holcim official said that the group had not made any provisions for the possible fines, nor had its Indian subsidiaries.
Lafarge, the world’s second biggest cement maker by sales, said: “Lafarge takes note of the order published by the CCI. We will review the detailed report and decide the suitable action to take.” Details of the two-year investigation remained sketchy, with Holcim noting only that it related to “the conduct of several of the leading cement producers in India”.
The cement industry has often been investigated for allegedly anti-competitive behaviour in many markets, with the most frequent charge being price-fixing among manufacturers. An investigation is under way in Brazil involving Holcim and five other producers on allegations of price fixing. Holcim has denied the accusations. Lafarge said it also had strict rules against anti-competitive behaviour.
Holcim said that since 2003 it had had a binding code of conduct for all group companies, requiring respect for fair competition and rejecting any abuse of dominant market positions. The company added that group companies were “regularly reviewed” by independent attorneys to ensure compliance.
Copyright The Financial Times Limited 2016. All rights reserved. Please don't cut articles from FT.com and redistribute by email or post to the web.