ACCC launches court action against cement maker

The Australian Competition and Consumer Commission has launched action in the Federal Court against Queensland cement company Cement Australia, alleging the company misused its market power to prevent competitors entering its market.

The Australian Competition and Consumer Commission has launched action in the Federal Court against Queensland cement company Cement Australia, alleging the company misused its market power to prevent competitors entering its market.

The ACCC alleges Cement Australia and three related companies breached section 46 of the Trade Practices Act by entering into and amending a contract to acquire fly-ash from Millmerran Power Station in south east Queensland.

Fly-ash is a by-product of burning black coal at electricity generating power stations and can be used as a cheap partial substitute for cement in ready-mix concrete.

The ACCC alleges Cement Australia had no commercial need for the fly-ash from Millmerran Power Station and bought it only to prevent competitors entering the market.

The ACCC is seeking declarations, injunctions, pecuniary penalties and costs. The matter has been set down for a directions hearing in Brisbane on 31 October 2008.

Cement Australia, which is co-owed by Mexican cement giant Cemex, Australian building materials company Hanson and global cement company Holcim, confirmed the proceedings in a statement.

“The company is considering its legal position and as the matter is currently before the Federal Court, it is inappropriate to comment further at this time.”

The action comes after the ACCC asked the Rudd Government to strengthen laws relating to the misuse of market power after a successful High Court challenge by Boral in 2003 was seen to weaken the effect of section 46.

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