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Israel’s ministries disagree over cement haulage pricing controls

World Cement,

Following yesterday’s news that the government panel sitting on the matter of competition in the Israeli cement market, one might expect action to be taken on the panel’s recommendations. While the measures designed to attract new players to the market are very much long-term goals, there were certain items that arose from the talks that could be dealt with on a more short-term basis. Indeed, Finance Ministry officials have said that they want price controls imposed on the transport of cement, saying it isn't clear why such measures have not already been put in place for cement haulage undertaken by the Taavura Group, the subsidiary of Nesher Israel Cement Enterprises that controls a large portion of Israel’s bulk haulage market.

However, the implementation of such measures is not proving as easy as once might thing. There is debate between various government ministries as to which should be given the authority to impose such controls. The treasury has made clear that it thinks it should be responsible, in partnership with the Transportation Ministry. Meanwhile, the Transportation Ministry takes pains to highlight that it does not deal with pricing controls. The body that normally sits on matters of pricing, the Industry, Trade and Labour ministry, denies responsibility for the transport of cement and rates for its pricing.

Whoever accepts the ultimate responsibility for implementing the controls, something that all three ministerial groups can agree on is that such extensive links between companies that control such large shares of markets that neighbour each other in the industrial chain is counterproductive to competition and should be avoided.

Written by Jack Davidson.

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