Bundeskartellamt publishes report on divestitures in the rolled asphalt industry

Today the Bundeskartellamt published a report on the state of proceedings it has initiated to break up anti-competitive company interlocks in the German rolled asphalt sector. The report provides an overview of the objective and the course of the divestiture proceedings, as well as the criteria applied to assess the individual cases. The Bundeskartellamt initiated the proceedings on account of findings from an inquiry into the rolled asphalt sector which was concluded in 2012 (see Bundeskartellamt press release of 01 October 2012).

Andreas Mundt, President of the Bundeskartellamt: "Our sector inquiry revealed that there was a Germany-wide closely-knit network of company interlocks in the rolled asphalt sector. Some of these interlocks were not compatible with competition law. In particular the four major suppliers of asphalt, Werhahn, STRABAG, EUROVIA and KEMNA, were involved in a large number of joint ventures. We have largely dissolved this nationwide network and have thus created the necessary conditions for real competition between the suppliers of asphalt. This will be particularly relevant for road construction works. We intended to improve the purchasing options of smaller, regional road constructors, in particular, who do not produce asphalt themselves."

Rolled asphalt is the material mostly used for road surfacing in Germany (more than 90% of the cases). The largest buyer of rolled asphalt is the public sector which purchases about 85% of the rolled asphalt produced. Already today, billions of turnover are achieved in the market for rolled asphalt. This volume is to increase even more in the coming years as the public sector has decided to invest significantly in the transport infrastructure, which includes many road rehabilitation and improvement projects. Since rolled asphalt has to be laid while it is still hot, there are a vast number of smaller regional markets located around the asphalt mixing plants.

Of the 104 divestiture proceedings initiated 96 have so far been concluded. More than half of the proceedings concerned joint ventures in which at least two of the four major asphalt suppliers Werhahn, STRABAG, EUROVIA and KEMNA participated. In 71 cases the existing company interlocks were broken up. In addition, numerous forms of information exchange which raised competition concerns were terminated, as well as other restrictive agreements between competing companies. In 25 of the cases the proceedings were discontinued. In several of these cases the positive effects of the dissolution of other joint ventures were taken into account in the decision to discontinue the proceeding. Eight proceedings are still ongoing because until now no divestiture measures have been undertaken or the measures undertaken so far were not sufficient.

Currently about 65 joint ventures are active in the market for rolled asphalt which do not raise any competition concerns. These are mostly joint ventures between small and medium-sized companies and ventures where the partners are active only on the upstream or downstream markets, e.g. the markets for aggregates or road construction.

The report published today also provides criteria for the assessment of joint deliveries by several asphalt producers.

The report is available (in German) on the Bundeskartellamt's website. It contains an executive summary in English (pp. 5-7 of the report).