CMA tells Breedon to sell Scottish plants

09/04/2014
Highways Reporters

The Competition and Markets Authority (CMA) has told Breedon Aggregates that it must sell two of its Scottish plants.

Breedon is required to sell an asphalt plant in the Aberdeen area and a ready-mixed concrete plant in the Peterhead area. The company must also give undertakings in respect of its asphalt plants in the Inverness area.

This follows the CMA’s final report into the company’s acquisition of Aggregates Industries’ business in northern Scotland.

In this report, the CMA states that Breedon and Aggregate Industries were previously competitors for many of these products across north-east Scotland and that asphalt customers in Aberdeen and Inverness, as well as RMX customers in Peterhead, could face higher prices due to the loss of competition and lack of alternative suppliers.

Simon Polito, chair of the inquiry group and CMA deputy chair, said: “Both these products are vital for construction projects and road building, much of which is funded by the public purse. It is therefore important to ensure customer interests are protected, which we are doing through the plant sales and price control.

“The markets for these products are local so the loss of a competitor in even a relatively small area matters – particularly 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.”

In a statement Breedon said: “The company will now work with the CMA to finalise the terms of these divestments and undertakings within 12 weeks. Breedon has every intention of reaching agreement with the CMA as quickly as possible, in order that it can expedite the sale of the assets concerned and proceed with the full integration of the former AI businesses.”
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