Holcim denies price fixing in Brazil

Swiss Cement producer Holcim faces a penalty of up to CHF 371 million (US$ 410 million) after being accused of price fixing by the investigative arm of the Brazilian Ministry of Justice.

But Holcim has refuted the allegations, claiming it had always co-operated and "not engaged in any illicit conduct".

The Brazilian Secretariat of Economic Law's (SDE) initial report on the alleged cartel must now be evaluated by the Administrative Council of Economic Defense (CADE), and Holcim said it would continue to defend its position as the proceedings continued.

The SDE has recommended that the CADE impose sanctions against several cement makers, two industry associations, one trade union and six individuals for their alleged participation in a cartel. The companies involved could be fined in up to 30% of their gross turnover in 2005 - the year before the investigation began.

The SDE said it had uncovered "substantive evidence" that Holcim do Brasil, Votorantim Cimentos, Camargo Corrêa Cimentos, Cimpor Cimentos do Brasil, Itabira Agro Industrial, Companhia de Cimento Itambé, Associação Brasileira das Empresas de Serviços de Concretagem (ABESC), Associação Brasileira de Cimento Portland (ABCP) and Sindicato Nacional da Indústria do Cimento (SNIC) colluded in a cartel in the Brazilian market for cement and concrete.

"Through meetings and e-mail exchanges the participants in the cartel managed to fix prices, establish production quotas, allocate markets and customers, co-ordinate the control of the sources of raw material and implement asset deals in order to harm companies that did not participate in the agreement," the SDE said.

Structural sanctions

Besides the imposition of fines, the SDE has also recommended that CADE impose structural sanctions on the accused companies such as the sale of assets and companies to re-establish competition in the market.

The SDE has also launched a sector inquiry in order to study measures that could encourage new companies to enter to the aggregates market and monitor the conditions of access to raw materials.