MRTPC to probe cement rate hikes

In view of a series of complaints alleging cartelisation, the Monopolies and Restricted Trade Practices Commission (MRTPC) has registered cases against cement manufacturers including Gujarat Ambuja Cements, Associated Cement Companies and various associations of cement manufacturers.

The commission directed DG - I&R (director-general, investigation and research) to look into the sudden and steep increases in cement prices, reported in May 2006. The preliminary investigation report is still being awaited.

Cement prices had risen from Rs 140 to Rs 220-240 a bag in two months. All the cases are pending before the MRTPC at various stages of enquiry and will be taken up soon.

The DG filed an application under Section 10 (a)(iii), read with Section 37 of the MRTPC Act, 1969, against Gujarat Ambuja Cements alleging that the company, in collusion with others, had created an artificial scarcity of cement leading to increase in prices, which constituted a restrictive trade practice as defined under the Act. The matter will come up for hearing on August 31.

The investigative arm also alleged that the prices of cement had been fixed arbitrarily and in an unjustified manner by Mumbai-based cement manufacturers and 44 other cement manufacturers.

There was little variation in the prices of cement manufacturers in the Mumbai region despite the fact that the costs of production were not identical, it noted.

The DG (I&R) also alleged that Associated Cement Companies, Mumbai, had increased its prices from time to time without having any increase in the production cost. This resulted in an unjustified rise in its profit, it observed.

In another complaint, Gayatri Agencies alleged that Chennai-based Cement Manufacturers' Association had throttled it in the matter of prices, sales and distribution of cement by imposing various restrictions.