CONCRETE MARKET
PRESS RELEASE
PRESS RELEASE
The Competition Authority has fined a concrete market cartel EUR40 million
At its meeting on 29 July 2004 the Competition Authority resolved that the agreement between Ambrosiana, Calcestruzzi, Cave Rocca, Cemencal, Colabeton, CosmoCal, Holcim Calcestruzzi, Holcim Cementi, Monteverde, Monvil and Unicalcestruzzi had substantially interfered with competition on the ready-mixed concrete market. Considering the gravity and the duration of the offence, the Authority has imposed fines totalling EUR40 million on the parties.
The investigation began on 3 April 2003 following a complaint made to the Authority claiming that the parties had concluded an agreement in the period 1999-2002 with the main purpose of sharing between them the supply of concrete for building sites in the Province of Milan (the geographically relevant market) and partly in a number of bordering provinces (Lodi, Como, Pavia and Varese) in order to increase their turnover by raising the prices charged and gradually reducing payment terms.
Following its investigations, acting on the basis of documents, minuted meetings and admissions made by some of the parties, the Authority ascertained the existence of a clearly defined anti-competitive agreement, designed to share the concrete market on the geographically relevant market.
This agreement laid down stringent procedures for controlling their shares, in order to make the agreement particularly binding. It provided specifically for the centralised processing of data on building sites and supplies through a constant and highly organised exchange of information and on-site inspections of the companies involved to check production figures and accounting records.
Even though the concrete market is geographically limited because of the short 'shelf-life' of concrete and its unfavourable weight/price ratio, the parties had numerous facilities at their disposal in Lombardy, such that the agreement significantly interfered with competition. The leading concrete makers on the geographically relevant market were therefore involved in the agreement (accounting for over 80% of the share) in an extremely important market in terms of volume and value.
The findings also confirmed that the reason for the agreement between the parties was to pursue integrated strategies to maximise joint profits on the cement and the concrete markets by vertically integrated companies; for the role of these latter companies was also appraised in terms of the market strength of the cement manufacturing groups which control them and which trade in the northwest of Italy with a market share in excess of 80%.
On the basis of these considerations, the Authority considered the offence to be particularly serious, and also considering the duration of the offence ordered the parties to pay the following fines:
| Ambrosiana Calcestruzzi | 1,000,000 euro |
| Calcestruzzi Spa | 10,200,000 euro |
| Cave Rocca | 800,000 euro |
| Cemencal | 1,650,000 euro |
| Colabeton | 5,000,000 euro |
| Cosmocal | 800,000, euro |
| Holcim calcestruzzi | 1,000 euro |
| Holcim Cementi | 8,999,999 euro |
| Monte Verde Calcestruzzi | 35,000 euro |
| Monvil Beton | 500,000 euro |
| Unicalcestruzzi | 11,000,000 euro |
Rome, 9 August 2004