Agreement brings new player into Conn. road deicing market‏

Nick Rees Nov. 20, 2009, 2:17pm

Richard Blumenthal (D)

HARTFORD, Conn. (Legal Newsline) - Competition in the road salt industry will be increased following an agreement announced by Attorney General Richard Blumenthal that enables a new vendor to enter the market.

"This agreement averts a monopolistic road salt market that would reduce competition and choice, and threaten to increase road deicing costs for taxpayers," Blumenthal said. "Road salt is a hot commodity in a cold winter - a necessary expense even in the best of times.

The agreement comes as part of an anti-trust investigation by Blumenthal into the consolidation of two giant deicing road salt companies. The merger of the companies jeopardizes competition in the Connecticut market, where the state's deicing road salt contract for the upcoming season are worth more than $15 million, and increases costs for the state and municipalities.

Competition would be substantially reduced by the acquisition of Morton International, Inc., by the International Salt Company's parent company, K+S, which would reduce competition and bulk deicing road salt provider choices in Connecticut.

The German K+S is one of the world's leading suppliers of salt products while the Chicago-based Morton is a leading salt vendor in North America.

The newly merged K+S and Morton have agreed to divest certain assets in Connecticut. The company will divest several Connecticut road salt contracts as well as portions of their rented stockpile space, trucking contracts and on-hand salt to allow a new state-approved road salt vendor - Granite State - to enter and compete in the Connecticut market.

"When budgets are frozen - along with roads - Connecticut taxpayers cannot afford the risks of reduced competition," Blumenthal said. "This agreement adds a new viable competitor to the market - avoiding a salt supply stranglehold and enhancing competition. This new company, approved by the state, will receive the contracts and assets necessary to serve Connecticut. Towns and cities can piggyback on these competitive state contracts, and benefit from preserved price competition."

Granite State, which has operated in other New England states for many years, has never bid on Connecticut contracts. Granite State, under the new agreement, must now perform under several International Salt Company contracts as International Salt Company had performed the previous year.

International Salt Company will also pay $40,000 to the state under terms of the agreement for the cost of its investigation and legal action.

More News