The Trinidad and Tobago Fair Trade Commission (TTFTC) is actively monitoring Trinidad Cement Ltd (TCL) to ensure that it is not abusing its monopoly power in the cement market.
TCL's announcement of an eight-15 per cent hike in its cement prices, effective next Monday, has raised concerns in the construction sector and among homeowners who want to conduct home renovations or small projects.
TTFTC executive director Bevan Narinesingh told Business Day it will continue to review the market over time to determine if the reasons TCL put forward for the increased prices are justified.
“We cannot do anything about TCL having a monopoly or dominant position in the market. The issue would be if the pricing is relative to an appropriate benchmark in way that that pricing is fair," he said on Wednesday.
"We will have to determine if the price rise is justifiable based on the circumstances they have before them. If the prices increased because of factors they could explain, even though it is a monopoly, would not constitute an abuse of dominant position.”
This week, TCL announced the price of Premium Plus cement will increase by 15 per cent and Eco-cement by eight per cent due to increases in input costs.
TCL manager Reshma Gooljar-Singh, in a letter to stakeholders, said the company can no longer maintain its prices because of the price hikes in natural gas, imported spares and raw materials used to manufacture quality cement.
In a price list sent out to customers, TCL said a 42.5 kg bag of Premium Plus and Eco-cement will increase respectively from $41.39 to $46.56, and from $38.85 to $43.71 VAT-inclusive.
TCL’s cement is also distributed in several countries in the region — St Lucia, Grenada, Guyana, Montserrat, St Kitts, St Vincent, and Suriname. Construction stakeholders have raised concerns of an abuse of pricing power by the company.
Narinesingh emphasised that the TTFTC will have to determine if the pricing structure implemented by TCL was justifiable by market conditions, if the measures implemented were the right ones to ensure market competition, and to monitor business/hardware agreements with TCL to ensure that there was not an abuse of power.
He added that the contracts that TCL engages in with distributors and retailers such as hardwares must allow for competition and for other brands to be sold.
“Even though a company is a monopoly, it cannot be acting in such a way to stifle competition. For instance, if you have an agreement that says you are tied to only exclusively buying TCL products as opposed to imported cement for an exorbitant time, we must ensure those agreements do not exist in the market right now.
“So, if indeed, importers/competitors are allowed to bring in larger amounts of cement at cheaper prices, there should be enough wiggle room for businesses/hardwares to decide to purchase from them.”
Narinesingh said since TCL signalled its intention to increase prices, the Government has put mechanisms in place for cheaper importation of cement and opened the market for clean
