Aggregates, cement and concrete sector referred to the Competiton Commission
A FULL investigation of Britain’s �3.3billion building materials industry was confirmed today by the Office of Fair Trading (OFT).
The referral of the industry to the Competition Commission (CC) comes after the OFT decided to stick by its provisional findings last August that the market for aggregates, cement and ready-mix concrete was not working well, potentially resulting in higher prices.
Five major players account for around 90% of the cement market, 75% of aggregates sales and around 70% of ready-mix production, the OFT said.
The regulator has raised concerns that the taxpayer could be paying too much for materials used in the building of schools, hospitals and roads. Central government is the industry’s biggest customer and 40% of all construction expenditure is on public buildings and infrastructure.
The CC, which will now conduct a detailed inquiry into the sector, could force companies to divest or break-up their British interests if anti-competitive situations are found.
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It is already looking into plans by Tarmac owner Anglo American and France’s Lafarge to merge their UK ventures. The other members of the ‘big five’ are Hanson UK, Cemex and Aggregate Industries.
OFT chief executive John Fingleton said: “Competitive, well-functioning markets are important to drive economic growth and keep costs low.
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“The aggregates, cement and ready-mix concrete markets are part of the larger construction industry which provides vital inputs across the British economy.”
The watchdog has also expressed concern about multiple contacts and information exchanges across the markets, with major firms supplying each other with both aggregates and cement, as well as asset swaps.