In the case of the cement companies, the “use of the pen” was made by the National Commission for the Defense of Competition (CNDC), a decentralized state body that reports to the Secretary of Domestic Trade, headed by Guillermo Hang, today under the Ministry of Economy. Last April, as revealed by Ámbito, the CNDC published a market investigation on the portland cement industry, in which it asserts that it is a sector with “high degree of concentration, high barriers to entry and reduced competitive dynamics”. The investigation began in 2016, under the management of Cambiemos.
Due to the characteristics of cement production, it is a globally concentrated industry. In Argentina, according to the CNDC, this allowed it to exercise “localized market power”, which through price discrimination, that is, selling the same good at differentiated prices generated a millionaire cost overrun for the construction industry. Cement is a key input, accounting for 11% of the cost structure, depending on the job. This year, the Government plans to disburse millions of dollars in cement, given that it will use 2.4 points of GDP in public works, a record figure for the last five years.
As this newspaper learned, the Association of Portland Cement Manufacturers (AFCP) adapted to a recommendation made by the Defense of Competition in the investigationwhere he spoke of the concern for the “exchange of information” between the four companies: Loma Negra, Holcim, PCR and Cementos Avellaneda.
The specific request was “stop requesting, receiving and distributing information on the production and dispatch of cement disaggregated by province, and less than 12 months old”, so that they cannot “coordinate their behavior”. The hypothesis is that, with commercially sensitive information, the possibility arises that decisions are not taken individually, which would be detrimental to “the normal functioning of the market”. Indeed, once the work was published, the Association stopped asking companies for these data and publishing them, in fact, they no longer appear on the website. “This does not mean that we show conformity with the foundations and conclusions, what we did was continue with the recommendation,” they told Ámbito from the Association.
For the time being, the Defense of Competition has advanced only with the “recommendation”. To advance with sanctions, there should be a formal complaint from a company or an ex officio job carried out by the head of the Secretary of Internal Trade. This is exactly what he is asking for: he sent a letter to Hang, for the “opening of conduct.” If it accepts it, with the “proof” of the report already made, it is that the State could advance in summaries, imputations or fines. Otherwise, only the recommendation already made will remain.
The Association had already “taken” this recommendation in the past, in a mega-investigation carried out by the Defense of Competition in 1999. That work finally led to a million-dollar fine in 2005, for having carried out cartelization for 20 years.
Source: Ambito
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