The Turkish Competition Authority (“Authority”) has published a final report following research into the cement sector (“Report”). The Report provides a comprehensive competition-focused analysis, based on data about firms and customers. It presents a long term and holistic reflection of the market and firm attitudes.

The Report includes two sections:

The Competition Authority’s Experience in the Cement Sector

An overview of sector characteristics and problems, including:

  • Seasonal Market Structure.
  • “Maverick” (killjoy) Firms’ Effect on the Cement Market.
  • Vertical Integration & Manipulation of Plant-Mixed Concrete Market.
  • Division of Clients.
  • Unusual Price Movements.
  • New entrants to the Market and Entry Barriers.

Cement Sector Economic Analysis

Economic analysis of five different factors: national, city, enterprise, product and client type, as well as clients.

  • Price-Cost-Demand: The Report notes that:
    • Price changes are mostly effected by previous period price alterations
    • It is not possible to observe specific correlation between price and cost changes in either long nor short terms.
    • If cement production cost for an undertaking decreases, the price of cement does not always decrease respectively. Rather, it may even increase.
  • Joint Pricing: The Report notes that:
    • Joint Profit Maximization was mostly carried out by the sector participators.
    • According to the Authority, Joint Pricing may originate from oligopolistic structure and rational choices; but also may originate from concerted action between the undertakings or collusion.

Overall, the Authority concluded:

  • Competition issues in the cement market are once again highlighted, as they have been in prior reports from the Authority.
  • The sector is falling behind the expected level of competition in respect to market division claims.
  • Competition in the market is not functioning properly due to regional and city market concentrations.

Please see this link for full text of the Report (only available in Turkish).