CMA Competition Concerns about Circular Ducting in the Midlands
Phase 2 Review Raises Questions
The Competition and Markets Authority (CMA) has released the findings of its Phase 2 review of the merger between duct suppliers Lindab and Birmingham-based HAS-Vent in 2023. The review identified competition concerns in the supply of circular ducts and fittings in the Midlands region of England.Evidence of Reduced Competition
The CMA's investigation found evidence that the merger could lead to reduced competition and higher prices in the Midlands.
- Lindab and HAS-Vent were the two largest suppliers of circular ducts and fittings in the region, with a combined market share of over 50%.
- The merger would create a dominant player in the market, reducing the number of suppliers and giving the merged entity significant bargaining power.
- The CMA also found that it was unlikely that new entrants or expansion by existing suppliers would be sufficient to offset the loss of competition.
Impact on Customers
The CMA's provisional findings suggest that the merger could have negative consequences for customers in the Midlands.
- Reduced competition could lead to higher prices for circular ducts and fittings.
- Customers may also have less choice and flexibility in sourcing these products.
CMA's Proposed Remedies
The CMA has proposed a number of remedies to address its competition concerns:
- Requiring the merged entity to divest HAS-Vent's circular ducting business in the Midlands.
- Imposing restrictions on the merged entity's ability to raise prices or reduce output in the Midlands.
Next Steps
The CMA's provisional findings will now be subject to consultation. A final decision is expected by November 2024.
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