UK aggregates market under investigation

Trading practices in the UK aggregates market are to come under scrutiny after the 2839 Office of Fair Trading has announced it is to launch a market study of the £4.8billion a year sector.

In a statement, the OFT said, “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.”

OFT senior director of infrastructure Heather Clayton added, “'n 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 contact companies directly and the 2897 Mineral Products Association has already said that it will cooperate fully with the investigation. The reported is expected to be completed by July 2011.