OFT launches market study into aggregates

93/10 7 September 2010

The OFT has today launched a market study into the UK aggregates sector.

The aggregates sector is substantial, with a turnover in 2008 of £4.8bn. The majority of aggregates are used in the construction of homes and roads, much of it for making products such as ready-mixed concrete, concrete products, mortar and asphalt. Aggregates are also used as base material under foundations, roads, and railways.

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 or by post to:

Aggregates Market Study
Office of Fair Trading
Level 2C
Fleetbank House
2-6 Salisbury Square
London EC4Y 8JX

Submissions must be received by 15 October 2010. The market study is expected to be completed by July 2011.

NOTES

Aggregates include any granular material formed from a natural rock substance. Primary aggregates account for 75 per cent of the market and include crushed rock, limestone, sand and gravel. Secondary aggregates account for the remaining quarter of the market and include by-products such as china clay waste, slate waste and ash as well as recycled aggregates (construction and demolition waste).
Updates to the timetable for the study will be published on the aggregates market study page.
Read the Q&As (pdf 141kb).

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