FTC raids Okayama concrete companies

JIJI

The Fair Trade Commission raided a cooperative association of concrete makers in Okayama Prefecture on Wednesday on suspicion the group and its members blocked newcomers from doing business.

The antimonopoly watchdog made surprise visits to more than 10 locations, including the offices of industry association Okayama Kenhoku Nama Konkurito Kyodo Kumiai, based in Tsuyama, Okayama Prefecture, and member companies, according to informed sources.

The association is believed to have asked construction firms not to use concrete from nonmember firms, the sources said, adding that the suspected business interference began in 2012 or earlier.

The association has seven member companies based in northern Okayama. The companies account for the bulk of concrete sold in the region.

In Tsuyama, the March price for standard concrete was ¥13,800 per cubic meter, according to the Construction Research Institute.

The FTC suspects the group hampered newcomers’ market access in order to keep concrete prices from falling. It is possible the action led to increases in construction costs, including for public works projects.

As a group of small and midsize companies, the association is permitted to set uniform product prices, a practice usually banned under the antimonopoly law. The exemption is based on a law allowing cooperation among small businesses facing the strong negotiating power of big companies.

While denying violating the law, the Okayama association said it will fully cooperate with the FTC’s investigation.