The other kind of Cartel: Colombia investigates cement industry for anti-trust violations

Posted on Dec 13 2013 - 9:09am by Editor
(Photo: Argos)

Colombian regulators are gearing up for aggressive investigations into allegations of price fixing in the cement industry, the El Espectador newspaper reported Thursday.Colombian regulators from Superintendency of Industry and Commerce have previously alleged Argos, Cemex, Holcim, Tequendama, and San Marcos formed a cartel to control the price of gray cement in 2010.

“This would have resulted in sustained and unjustified increases in the prices of gray cement,” the regulator says.

Now, regulators are starting to push against many industries, including cement, sugar and rice where there have been allegations of price-fixing, that is, where the competitors in a specific industry from a “cartel” to collude to raise prices on a product.

Not the first time

In response, Cementos Argos, Colombia’s largest cement manufacturer stressed to El Espectador that it has never participated in any market sharing agreement or price definition, in Colombia or in other markets in which it competes.

But in 2008, Colombia’s Superintendency of Industry and Commerce imposed a fine of $1,375,241 on Colombia, Cementos Argo, and the local arms of Mexican and Swiss companies for participating in a price cartel for Portland cement and dividing up the national market during 2005.

The problem with prosecution

The Organisation for Economic Co-operation and Development (OECD), said in a 2009 report that Colombia’s competition law is one of the oldest in Latin America. But after the law was approved by the national Congress in 1959, Colombia has struggled to appropriately prosecute and fine violators.

One reason for this may be that until this year, Colombia did not have a methodology for fixing fines that were imposed as a result of violations to competition rules, the OECD said in a report in July.

At the start of 2013, Colombia’s Superintendency of Industry and Commerce started to build a system that would make the allocation of fines fair and in proportion with the scale of the violation.

Not the only industry

The cement industry is not the only industry being investigated this year: in July Colombia announced a cap on the price of 195 pharmaceutical drugs it says is being sold over price in the country.

MORE: Colombia should place cap on 195 high-cost drugs suspected of price-fixing: Commission

Sources

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