Breedon Aggregates may have to sell asphalt and ready-mix concrete operations in the north and north-east, a competition watchdog said yesterday.
The Competition Commission (CC) provisionally found that some customers could face higher prices following Breedon’s acquisition of assets from Aggregate Industries UK last April.
Breedon took over 11 aggregate quarries, four asphalt plants, nine ready-mix concrete sites and two concrete-block factories located at 18 sites in Grampian, Tayside, Highland and the Hebrides in a £34million deal.
Announcing provisional findings from an inquiry launched late last year, the CC said Breedon and Aggregate Industries had been competitors, so asphalt customers in Aberdeen and Inverness could face higher prices.
Ready-mix concrete customers in the Peterhead area were also vulnerable, it added.
The CC also published a notice of possible remedies to address “anti-competitive effects” of the merger.
These include a recommendation for Breedon to sell asphalt and ready-mix concrete operations in areas where competition has been reduced.
Ready-mix operations in the Peterhead/Stirlinghill area of Aberdeenshire and asphalt sites near Aberdeen, such as Craigenlow, at Dunecht, or Tom’s Forest, at Kintore, have been recommended for one or more disposals.
The CC has also suggested Derby-based Breedon could sell one or more asphalt operations near Inverness, although it said “behavioural remedies” could be used instead as a substantial lessening of competition there was unlikely to continue beyond 2018.
Offering another option for resolving the competition issues, the CC said all the assets Breedon acquired from Aggregate Industries could be sold.
CC deputy chairman Simon Polito said: “The nature of these products means the markets are local.
“The loss of a competitor in even a relatively small area matters when the cost and proximity of the production site are the most important factors for customers, and in a market where most prices are negotiated.
“We now want to look in detail at what measures will protect the interests of customers.
“This is likely to involve the sale of asphalt and ready-mix sites in the affected areas.”
Breedon, which has 21 days to respond to the provisional findings, said it would be “discussing arrangements for the possible disposals with the commission”.
It added that it would then “seek to expedite the sale of such assets as may be required in order to minimise disruption and secure the future of the small number of employees affected”.
The CC is required to publish its final report by May 5.