A Brisbane-based supplier of cement, along with one of its subsidiaries and two other companies, breached competition laws by entering into contracts with South East Queensland operators of power plants in an effort to keep competitors out of the market, a Federal Court judge has found.
In a judgement laid down earlier this week, Justice Greenwood J found Cement Australia Pty Ltd along with one of its subsidiaries and two other companies – Pozzolanic Enterprises Pty Ltd and Pozzolanic Industries Pty Ltd – breached section 45 of the then Trade Practices Act 1974 (now Competition and Consumer Act 2010) by entering into exclusive contracts with operators of the Millmerran, Tarong, Tarong North and Swanbank power stations in South East Queensland.
They did so to acquire flyash, a by-product of burning black coal at power stations which can be used as a cheap partial substitute for cement, between 2002 and 2006.
Greenwood found the contracts were designed to lock competitors out of the South East Queensland flyash market, and that with the combined market share of the companies involved, the impact of a new competitor would have been significant.
Australian Competition and Consumer Commission (ACCC) chairman Rod Sims welcomed the decision, saying the declarations were a further step in resolving long running proceedings against the accused and the extensive nature of the contraventions found was particularly pleasing.
“The ACCC took action in this matter originally due to its concern that a dominant player in a market appeared to be foreclosing, and preventing, competition,” Sims said in a statement. “The declarations and findings made by the court demonstrate this concern was warranted.”
Cement Australia is jointly owned by a subsidiary of German aggregates giant Heidelberg Cement and Swiss cement manufacturer Holcim.
The matter will return to court later in the year to determine the penalties involved.