ACM: commitments in ready-mix concrete sector have been successful
Since the introduction of the Dutch Competition Act, the Netherlands Authority for Consumers and Markets (ACM) has applied itself to improving competition in the ready-mix concrete sector. In 2016, ACM succeeded in considerably reducing the anticompetitive risks in that sector by means of commitments. ACM recently carried out follow-up checks, which have revealed that the parties involved have made serious work of their commitments to ACM. This is good for competition. However, there is still room for improvement. The next series of follow-up checks is planned for 2020.
In the 1950s, the ready-mix concrete sector needed to meet the considerable demand for transportable concrete, and thus greatly contributed to the reconstruction efforts in the early post-war period. Because concrete hardens fast, it can only be transported for a limited amount of time, and that is why a lot of ready-mix concrete plants became operational throughout the Netherlands. Over time, the interests of a relatively small number of competitors gradually became intertwined. After the introduction of the Dutch Competition Act in 1998, ACM (and its predecessor, the Netherlands Competition Authority) established that the market structure and the close relationships between the companies and/or employees possibly harmed competition. As a result, construction companies and governments possibly ended up with the short end of the stick. That is why, in recent years, ACM regularly devoted attention to the competitive landscape in the building-materials sectors.
In the summer of 2016, ACM made binding arrangements with the ready-mix concrete sector. Seven companies1 made commitments to ACM, and made serious work of complying with them. For instance, several companies have sold their shares in jointly operated ready-mix concrete plants. They also no longer have a competitor carry out a contract if it is not necessary to do so. Furthermore, they are registering their collaborations, and informing their buyers of these collaborations. The nature and contents of contracts with competitors are also registered. And it has become easier to enter the ready-mix concrete sector. This has already resulted in ready-mix concrete production in places where this was not contractually permitted before.
Room for improvement
ACM has established that the commitments reduced anticompetitive risks in the sector. The main gains have been the termination of the collaborations in ready-mix concrete plants with high combined market shares, and increased awareness of competition rules among the companies involved. Transparency has increased, which means anticompetitive risks have been reduced. However, ACM does see room for improvement in the implementation of the commitments. Each company has different areas where they could improve on. ACM has informed each ready-mix concrete company individually about this. ACM will carry out a new follow-up check within the next two years. The commitments were made for ten years (they will expire in 2026).
1 Mebin B.V., Cementbouw B.V., Dyckerhoff Basal Nederland B.V., Bruil Beton & Mix Groep B.V., Mortelcentrale Cuijk B.V., Rokramix Holding B.V., Betoncentrale Rokramix Enschede B.V., Betoncentrale Rokramix Rijssen B.V., Betoncentrale Rokramix Hengelo B.V., Rouwmaat Groep and Agar Holding B.V.