On 16 August 2011, the OFT published its report on its market study into aggregates, cement and ready-mix concrete. The study began in September 2010 and was initially focused on the aggregates sector. Its scope was extended in February due to concerns expressed regarding vertical integration between the aggregates, cement and concrete sectors.
The OFT has identified a number of features of the market that may adversely affect competition including high barriers to entry, highly concentrated markets, vertical integration, homogenous products, market transparency and supply by major firms to each other to serve local markets (multi-market contacts). The OFT is proposing to make a market investigation reference to the Competition Commission under section 131 of the Enterprise Act 2002. It asked for views on its proposal to be submitted by 30 September 2011. An interesting feature of the case is that the European Commission is currently investigating the markets for cement and related products (including ready-mix concrete and aggregates). The OFT’s guidance indicates that it will not normally refer a market to the CC when that market is being investigated by the Commission. However, in this case, the OFT believes that a reference is appropriate because it does not consider that the EU investigation can address the underlying competition problems or that a CC investigation would entail undue burdens.