OFT to investigate aggregates sector

The Office of Fair Trading is to investigate the workings of the UK aggregates sector, it was announced today.
The aggregates sector had a turnover in 2008 of £4.8bn, with most aggregates used for building homes and roads and in ready-mixed concrete, concrete products, mortar and asphalt.

The OFT says that aggregates is a sector with “high barriers to entry, increasing concentration at the local level and Government involvement in the form of a national system of control over outputs”.

The study will look at all of these factors to determine how they influence competitive conditions and whether the market delivers good value for money to tax payers and end consumers as the cost of aggregates flows through to the construction of essential infrastructure.

Heather Clayton, Senior Director of Infrastructure, said: “In the present climate, well-functioning markets are even more important to help spur economic growth.

“Aggregates is an important sector in its own right but it is also part of the larger construction industry which plays a key role in the country’s economy. Because the cost of aggregates is reflected in the price consumers, and tax payers, pay for essential infrastructure, from housing through to roads and major capital building projects, it is important that the market is as competitive as possible.”

The OFT will be speaking with key parties directly. Others who wish to make a submission should send their written views by email to: aggregates@oft.gsi.gov.uk .

Submissions must be received by 15 October 2010.