Lafarge risks 40m-euro fine for abuse of a dominant position

Cement producer Lafarge Cement (Romania), local subsidiary of French group Lafarge, could receive a fine of up to 10% of its turnover, equivalent to around 41 million euros (considering the 2008 turnover, of around 417 million euros) if found guilty of abuse of a dominant position on the CEM I 52.5R cement market. Lafarge is the only producer of CEM I 52.5R cement variety, which is more resistant than regular cement. “The CEM I 52,5R variety accounts for very small share of the market, because it is used for special works, which require a higher degree of resistance. Since infrastructure works have not been very common lately, demand has been low and only one of the cement producers still manufactures this variety,” said sources from the cement market. The Competition Council (CC) last week opened an investigation into a possible breach of the Competition Law by Lafarge Romania. The CC inspectors went on unannounced inspections at the headquarters of the company, as well as at its two production facilities in Hoghiz and Medgidia. “Lafarge Ciment (Romania) has and will always respond promptly to requests from the Competition Council and support its actions as a competition authority, under the law. Lafarge Cement reiterates that its actions are in full compliance with competition legislation, and that this is fully reflected in the group policy,” said Lafarge Ciment representatives. Lafarge was fined around 37.7 million RON (6.5% of its 2004 turnover) by the Competition Council in 2005, when all cement producers on the Romanian market – Lafarge, Holcim and Carpacement were accused of setting up a price-fixing cartel and were fined around 27 million euros.