CADE upholds cement cartel fines

The Brazilian competition authority, Conselho Administrativo de Defesa Econômica (CADE) has upheld fines of BRL 3.1 billion (US$ 930 million) against six companies, three trade associations and six individuals found to be operating a cement cartel. The new announcement reaffirms penalties initially announced in May last year, although the authority said it had changed one of the fines.

CADE’s rapporteur for the case, Ana Frazão said, "There have been considerable repercussions of the trial, with media coverage and communication channels, which is why part of the publication's objectives have been achieved."

The companies implicated in the cartel are Votorantim, Camargo Corrêa, Cimpor, Holcim, Itabira and Lafarge. Lafarge had previously settled its involvement with CADE through the negotiation of divestments and a fine. Since the case started Camargo Corrêa and Cimpor have merged to form InterCement.

The convicted parties now have 30 days to pay their fines.

In addition to the fines, CADE has imposed the mandatory divestment of 20% of production capacity in the regions in which any of the six companies own more than one plant. The buyer is not allowed to be another member of the cartel and the ruling applies to all shareholdings in plants, including minority interests.

CADE said the 20% was the minimum market share a new competitor would need to have to enable effective competition.

The cartel companies are also barred from making any acquisitions in the cement sector for five years.