On 18 January 2012, the Office of Fair Trading (OFT) made a
market investigation reference to the Competition Commission (CC)
in respect of the aggregates, cement and ready-mix concrete markets
in Great Britain (i.e. not Northern Ireland).
This follows the OFT's provisional conclusions published in
August 2011 and the resulting public consultation (see our earlier
law-now.)
The OFT is concerned that structural features of these markets may
prevent, restrict or distort competition. Problematic features
include:
- High barriers to entry in aggregates and cement;
- High concentration – five major players account for upwards of 90% of the cement market, 75% of aggregates sales and around 70% of ready-mix production;
- The effects of vertical integration: the major firms are integrated across aggregates, ready-mix concrete and cement;
- Multiple contacts and information exchanges across the markets, with major firms supplying each other with both aggregates and cement, and engaging in joint-ventures and asset swaps.
The OFT did not refer the aggregates, cement and ready-mix
concrete markets in Northern Ireland as it does not find
problematic features are present to the same degree as in Great
Britain.
The CC has a maximum of two years in which to carry out a market
investigation. Should the CC ultimately decide that there are
market features which prevent, restrict or distort competition, it
has a range of powers to ensure that these matters are addressed,
including the power to make legislation and the ability to accept
voluntary undertakings. Alternatively, it may recommend remedial
action be taken by others, such as government, regulators and
public authorities.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 18/01/2012.