On 16 August 2011, the Office of Fair Trading (OFT) announced that it has provisionally decided to
refer the aggregates market to the Competition Commission (CC) for
further investigation. The OFT's consultation on that
provisional decision is open until 30 September 2011.
At the same time, the OFT published the report on its study of the
aggregates market and the reasons for its reference proposal. It
identified issues in the structure of the aggregates market,
including high and increasing concentration, the effects of
vertical integration and high barriers to entry due to the
difficulty of obtaining planning permission. The OFT also noted
that it has concerns about certain conduct of firms within the
aggregates market.
Other issues of OFT concern include:
- information exchanges across the markets for aggregates and cement; and
- an apparent squeeze between rising cement prices and stable or falling ready-mix concrete prices.
The OFT notes that some of the identified issues
are "persistent concerns".
An investigation by the CC would be a lengthy and detailed process,
involving significant input by the companies concerned. If the CC
finds that market features prevent, restrict or distort
competition, it has extensive powers to take actions to remedy
these adverse effects. These powers include obtaining undertakings
from companies or imposing orders to address competition
issues.
If you want to make your voice heard –whether to argue
for or against a full CC market investigation – now is
the time to do it.
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 16/08/2011.
