FTC Charges Lafarge, Boral Violated Antitrust Laws

The Federal Trade Commission today charged Boral Ltd. and LaFarge SA with violating federal antitrust laws by establishing a joint venture, Monier Lifetile LLC, that combined the concrete roofing tile (CRT) manufacturing divisions of the two largest producers of CRT in the United States. CRT is the predominant roofing material used in new home construction in areas of the Southwest and Florida. The Commission charged that the joint venture could lessen competition, lead to increased prices, and reduce quality in the market for CRT.

"This joint venture threatens to diminish, significantly, competition for concrete roofing tile, leaving consumers in Florida and the Southwest at risk of paying considerably higher prices," said William J. Baer, Director of the FTC's Bureau of Competition. "The Commission's complaint seeks to restore the vigorous competition that used to exist between these two firms."

Monier Lifetile LLC, based in Irvine, California, is owned by LaFarge SA and Boral Ltd. Boral, based in Sydney, Australia, with sales of approximately $3.6 billion in 1996, was the second largest producer of concrete roofing tile in the United States, prior to the formation of Monier Lifetile LLC. Through its Monier, Inc. subsidiary, Redland PLC was the largest producer of concrete roofing tile in the United States. Since the formation of the joint venture, LaFarge SA, based in Paris, France, acquired Redland and its interest in Monier Lifetile.

According to the FTC complaint, Boral and Redland formed Monier Lifetile, a limited liability CRT joint venture, in August 1997. In the areas where CRT roofs are prevalent -- Southern California, Nevada, Arizona and Southern Florida -- there are few competitors. The FTC complaint alleges that because of the high cost of entering and producing the tile compared to the low potential sales revenues, entry into the CRT market by a new competitor is not likely to deter or counteract the likely anticompetitive effects of the joint venture.

The FTC alleges that the joint venture has:

• eliminated Boral and Redland as independent competitors; and
• increased the likelihood of increased prices, reduced service, and reduced quality in the markets.

Following a trial, an administrative law judge could order Monier Lifetile LLC to (1) divest either the Boral assets or the Redland assets; (2) construct or divest a manufacturing facility with the capacity and capabilities comparable to a Boral facility destroyed by fire prior to the formation of Monier Lifetile LLC; (3) dissolve the Monier Lifetile joint venture; and/or (4) provide the Commission advance notice before acquiring any CRT assets for a ten year period.

The Commission vote to issue the administrative complaint was 4-0.

NOTE: The Commission issues a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The issuance of a complaint is not a finding or ruling that the respondent has violated the law. The complaint marks the beginning of a proceeding in which the allegations will be ruled upon after a formal hearing.

Copies of the complaint and an FTC publication, "Promoting Competition, Protecting Consumers: A Plain English Guide To Antitrust Laws" are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

(FTC File No. 91-0060)