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Government Plans to Ban Cement Price Rise Alerts

A competition watchdog commissioned by the Government has drawn up plans to prevent cement companies from sending out blanket price rise letters across the construction industry. During a review of competition in the sector, the watchdog found cause to push for greater competition in the sector, which has long been subject to high cement prices as a result of coordination between the “Big Three” producers; Lafarge Tarmac, Cemex and Hanson.

Though problems in the industry have been widely recognised and under investigation for a number of years, fresh measures to try to inject greater competition into the sector are now being taken in solidarity with the rest of the constructions sector. This summer the Competition Commission ordered Lafarge Tarmac to sell a cement plant, while Hanson were compelled to sell a ground granulated blast furnace slag plant to help make room for fresh names in the sector.

Now the Competition Commission want to give power to buyers by preventing concrete producers from sending blanket price rise letters to their customers. Instead, the producers will be expected to make correspondence about price hikes personal and transparent. Details included in each personal communication should include:

• Previous unit price paid
• New unit price
• Clear details of additional fees & charges

By introducing greater transparency, it is hoped that clients will find themselves with the information they need to make different decisions about their purchases and search for better deals elsewhere, perhaps amongst the new competition the Government has been trying to inject into the market.

In 2013 it was revealed that “price fixing” or “coordination” between the big three producers had cost the UK construction sector £180m since 2013. With their stranglehold easing but not broken, this fresh set of measures could be a step in the right direction.

Who is to blame for the high price of cement? Would a personalised, transparent run down of your costs help you to make more informed decisions when price hikes are announced? Have your say below.