CREDAI moves CCI against cement firms for price cartelisation

Realtors' apex body CREDAI has filed a complaint with the Competition Commission against cement manufacturers alleging price cartelisation by raising rates up to 40 per cent in the last two months.
The Confederation of Real Estate Developer's Associations of India (CREDAI), which has about 10,000 members, filed the complaint last week with the Competition Commission of India (CCI) against the Cement Manufacturers' Association (CMA).
The move follows the decision of the CREDAI's NCR chapter to stop purchase of cement from companies like Ultratech and Lafarge for unilaterally hiking prices in last one month.
CREDAI (National) President Getamber Anand said the association has filed complaint against the CMA as prices have risen sharply despite low demand of cement. He said the prices have risen to about Rs 300 per bag (of 50 kg) in Delhi-NCR from Rs 210 a bag on August 1.

"To control the cost of construction and make home prices work for the common man, CREDAI has moved the CCI against cement manufacturers who have been unduly increasing the cost of cement," CREDAI said in a statement.
In its submission to the CCI, CREDAI said that the cost of raw material used in manufacturing cement has come down this year but the cement firms did not pass the benefit. "Instead, they seemed to be working together in controlling supply and prices," it alleged.

Despite low demand, the association said, the prices of cement have jumped by 20-40 per cent in major cities across India in the last couple of months.

"It is unfair that the cement manufacturers indulge in practices that control the prices of cement. CCI has warned CMA in the past as well but it is unfortunate that they seem to be continuing with their price and market manipulation," Anand said.
Stating that the hike in cement prices have been "unusual and without any reason", CREDAI-NCR President Manoj Gaur said "This is because of cartelisation among the cement companies".
Ultratech Cement, Shree Cement, Zuari Cement, Lafarge India, JK Cement, JK Lakshmi Cement and Jaiprakash Associates are the members of the CMA among others.
CREDAI has submitted to the CCI that cement manufacturers have contravened the Commission's 'cease and desist' order of 2012 "as the prices of all the cement manufacturers are moving in tandem leaving the customers with no choice but to succumb to the cartel".

In June 2012, the CCI had imposed a hefty penalty of about Rs 6,200 crore on 11 leading cement companies for price cartelisation.
"This is quite unfortunate and not in public interest," CREDAI said, adding that the builders are unable to bring down the construction cost and make affordable homes.
CREDAI said that demand for cement has declined in view of huge slowdown in the real estate sector, which accounts for nearly half of the cement demand in the country.