The Hindu Business Line : Competition panel to seek cement cos’ compliance

Cement industry majors indulging in cartelisation may find the going tough. Even as MRTPC has held the cement companies guilty of cartelisation, the Competition Commission of India (CCI) has decided to initiate a dialogue with apex industry association to ensure their compliance with the competition law.

“In our advocacy role, we want the cement association to meet us so we can have a dialogue with them on compliance with competition law. This is to ensure that the industry is ready to meet the principles of the Competition Act, and to make them aware that non-compliance could mean trouble once the provisions of the Act are enforced,” Mr Vinod Dhall, Member and Acting Chairman, CCI, told Business Line.

Simply put, cartelisation refers to attempt by companies to collude and fix prices which are artificially high.

“It would be ideal if various industries themselves come out with a policy against cartelisation, as is followed in many developed and developing nations where they come out with voluntary norms stipulating that the players will not discuss among themselves pricing or discounts, customers and even tender bids,” he explained.

Mr Dhall’s comments assume significance in the backdrop of MRTPC holding top cement companies guilty of cartelisation under the aegis of Cement Manufacturer’s Association (CMA). Delivering the judgment in a 1990-case, the Bench issued a cease and desist order against the 41 companies and directed them “not to indulge in any arrangement directly or indirectly through the instrumentality of CMA, in fixing the prices of their produce in concert or in follow up of a concert.”

CCI, which had earlier also urged the cement association and other industry association such as shipping liners and tyre manufacturers, to discuss the competition advocacy issues, had found only two associations responding to its call. “Cement and explosives industry bodies did not come forward. CCI now is formally going to write to them,” he said.