Competition watchdog CCI today imposed a hefty penalty of about Rs 6,200 crore on 11 leading cement companies including ACC,Ambuja Cements,Ultratech and Jaypee Cements for price cartelisation.
The other companies found guilty are Grasim Cements now merged with Ultratech Cements,Lafarge India,JK Cement,India Cements,Madras Cements,Century Cements and Binani Cements. The industry body Cement Manufacturers Association (CMA) has also been fined.
The firms in violation of the competitive laws have been directed to deposit the penalty within 90 days.
“The Competition Commission of India has found cement manufacturers in violation of the provisions of the Competition Act,2002 which deals with anti-competitive agreements including cartels.” an official statement said.
The penalty is equivalent to 50 per cent of their profit for 2009-10 and 2010-11,it added.
The CCI passed the order following a probe by Director General of Investigation on complaint filed by Builders Association of India.
“While imposing penalty,the Commission has considered the parallel and coordinated behaviour of cement companies on price,dispatch and supplies in the market,” the statement said.
The CCI found that the cement companies have not utilised the available capacity so that there are reduced supplies in the market and they can raise prices in times of higher demand.
CCI felt that the act of these cement firms 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 construction and infrastructure industry vital for economic development of the country”.
The 11 cement companies have been directed to ‘cease and desist’ from indulging in any activity relating to agreement,understanding or arrangement on prices,production and supply of cement in the market,the statement said.
The industry body CMA has been asked to disassociate itself from collecting wholesale and retail prices through the member cement companies and also from circulating the details on production and dispatches of cement companies to its members.
The Builders’ Association of India was represented by senior advocate O P Dua.