The UK cement market has been under much scrutiny recently. In January 2014, the old UK competition regulator, the Competition Commission (now replaced by the Competition and Markets Authority or CMA) published its final report following its market investigation into the aggregates, cement and ready- mix concrete market. While it did not find any cause for concern in the markets for ready-mix concrete and aggregates, the CMA ruled that a combination of structural and behavioural features in the cement market gave rise to an adverse effect on competition in that market through coordination, particularly between the three largest manufacturers: Lafarge Tarmac, Cemex UK Operations Limited and Hanson and HeidelbergCement AG. This ultimately resulted in higher prices for cement users – about £30 million a year. It was also noted that certain parts of the market are too concentrated, with very few players. As a result, Lafarge Tarmac was ordered to sell off one cement plant in either Cauldon or Tunstead to an independent cement producer from outside the UK with adequate expertise and financial resources which would not itself create more competition or regulatory concerns. In March 2014, the Competition Appeal Tribunal (CAT) published a notice of appeal lodged by Lafarge Tarmac against the findings of the CMA.
Two of Lafarge’s grounds of appeal were (1) that the divestment orders were disproportionate and a serious interference to their property rights; and (2) there had been procedural unfairness and Lafarge had not been given the opportunity to disclose critical evidence. As part of the appeal, Lafarge sought to submit a new expert report, but its application to submit this new evidence was dismissed by the CAT, which said it was not satisfied there was a valid basis to admit fresh evidence (generally not permitted in judicial review proceedings). Lafarge’s challenge will come before the CAT on 29 September 2014. In addition, Hope Construction Materials has appealed the CMA’s decision that the divested Lafarge Tarmac cement plant cannot be bought by a UK cement producer.