Competition Commission findings may force UK disposals

The UK’s Competition Commission (CC) is lining up a range of measures to open up the UK cement market including the possible disposal of plants and reduction of capacity, after provisionally finding that the sector's structure and conduct limit competition.

The CC has published a summary of its provisional findings in its market investigation into the supply of aggregates, cement and ready-mix concrete in Great Britain. The regulator said on Tuesday that the UK market is highly concentrated with only four producers: Lafarge Tarmac, Cemex UK, Hanson Cement (HeidelbergCement) and Hope Construction Materials. It said that the situation had weakened competition and cost British consumers at least GBP180m. It did, however, note that its findings did not mean companies were explicitly colluding or operating a cartel.

"The established producers know too much about each other's businesses and have concentrated on retaining their respective market shares rather than competing to the full. Strikingly, despite low demand for cement over recent years, prices and profitability for the GB (British) producers have still increased," the CC's Deputy Chairman Martin Cave said.

The commission said it was considering measures such as requiring one or more of the top three producers to dispose of some plants or reduce their cement production capacity, creating a cement buying group or restructuring the disclosure of cement market data by the UK government and cement producers.

It will publish its final report by January 17 next year.