The Hungarian Competition Authority (GVH) has initiated competition supervision proceedings against one of the most important gravel mining companies in Central Hungary on suspicion of abuse of a dominant position. The notice did not state which company was involved. We asked the GVH and we received the following answer:
As this is an ongoing procedure, we cannot share more information about the name of the company or the (identifiable) location in Central Hungary due to the presumption of innocence of the company concerned.
Portfolio.hu noted that it is interesting that while the GVH also named the specific companies during an investigation into a previous cement market cartel, this time the name of the company is not mentioned.
According to the GVH’s suspicions, the company in question was presumably able to reduce its extraction capacity in the Central Hungarian region in order to sell gravel at a higher selling price.
On July 20, 2021, the National Competition Authority conducted an unannounced on-site search at the headquarters of a construction company active in mining. According to the Competition Authority’s suspicion, the company, which plays a significant role in gravel extraction in Central Hungary, may have reduced its capacity compared to other mines in the local market – in addition to growing demand – in order to sell gravel at higher prices.
The Hungarian Competition Authority initiated the proceedings following a market signal, with an on-site investigation subject to judicial authorization. The allegedly infringing conduct affects gravel, one of the most significant domestic mining raw materials, which is essential for domestic construction and residential construction. The alleged infringement may thus affect a wide range of consumers.
The initiation of competition proceedings does not mean that the undertaking has committed the alleged infringement. The procedure is aimed at clarifying the facts and thereby proving the alleged infringement. The time allowed for the procedure shall be six months, which may be extended twice, if necessary, by a maximum of six months each.
As is known, the prices of building materials have gone down properly, ÉVOSZ first sounded the alarm, the government also announced measures, and the GVH indicated that it was investigating the price increases. There is market news about the gravel mines that the state may want to get them back. At the beginning of privatization in Hungary, the gravel mines soon sold out, and the fact that there is an intention to renationalise it shows, for example, that privately owned gravel mines can only be sold to anyone and anyone, as the state has the right of pre-emption.
Featured image illustration.