Inquiry into aggregates market unnecessary says Hanson

Published:  14 September, 2011

LONDON: Hanson says the Office of Fair Trading's intention to recommend the Competition Commission investigate the UK's building materials market will be an "unwarranted distraction" if it proceeds.

The OFT has identified five key concerns following its investigation into the UK's £3.4bn aggregates, cement and ready-mix concrete sectors and believes the sector warrant investigation, including the dominance of the five main players: Hanson, Cemex, Aggregate Industries, Anglo American (owner of Tarmac) and France's Lafarge.

John Fingleton, chief executive of the OFT, says: "We are concerned that competition is not working well in these sectors, with underlying features of the market giving rise to persistent concerns."

A spokesman for Hanson says that at a time when the construction industry is on its knees, an investigation will be unlikely to result in drastic changes "either way" but will be "distracting" and put further strain on suppliers such as itself.

"We've closed 20 quarries and 20 ready-mix concrete plants in the past two years, taking capacity out of the market," he says. "An investigation would not be helpful at a time when building activity is at a historic low."

The OFT is conducting a consultation on its proposal to refer the market to the Competition Commission until 30 September. Submissions can be made at aggregates@oft.gsi.gov.uk

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