Today the Bundeskartellamt published a final report on its inquiry into the rolled asphalt sector launched in June 2010. The report describes the competition problems arising from company interlocks between the different suppliers of rolled asphalt in Germany.

Andreas Mundt, President of the Bundeskartellamt stated: "The report states that there is a nationwide, closely-knit network of company participations and jointly operated asphalt mixing plants in Germany. In particular the four major suppliers Werhahn, STRABAG, EUROVIA and KEMNA all have participations in a vast number of joint ventures. As a consequence, the parent companies and their jointly operated subsidiaries are all active on the market for rolled asphalt. Such a widespread network can result in conflicts of interest as well as mutual dependencies and business considerations and thus have a negative impact on competition in the sector. Where such joint ventures are not compatible with competition law, the Bundeskartellamt will have them disbanded."

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 with about 85% of the rolled asphalt produced. Annual turnover with rolled asphalt in Germany amounts to approx. 2 billion Euros. Since rolled asphalt has to be laid while it is still hot, there is a vast number of smaller regional markets around the individual asphalt mixing plants (delivery radius of about 25 km).

There are more than 550 asphalt mixing plants in Germany. About half of these are operated by a joint venture. The companies Werhahn, STRABAG, EUROVIA and KEMNA hold participations in 405 asphalt mixing plants; about 60% of these are operated as joint ventures.

Rather often, these joint ventures have participations in one another and integrate smaller competitors as associates. In many cases, at least two associates and their joint ventures operate their own plants in the same regional markets or in neighbouring markets.

In its sector inquiry, the Bundeskartellamt examined recurring problematic market constellations and assessed them under competition law aspects. According to the case-law of the Federal Court of Justice (BGH, decision of 04.03.2008, KVZ 55/07 - Nord-KS), it is generally presumed that anti-competitive business considerations are practised among associates and a joint venture if at least two of the associates and the joint venture are active on the same product and geographic markets with their own mixing plants. The application of this general presumption has to be reviewed in each case. In the case of rolled asphalt, the presumption applies to close to 60% of the 130 joint ventures in the market.

Other constellations might also require an examination under competition law, in particular if the economic activities of the associates occur in geographical proximity or information of competitive relevance is exchanged via the joint venture.

The Bundeskartellamt is therefore of the opinion that changes must be made to the structure of businesses in the rolled asphalt sector. The final report on the sector inquiry describes the next steps the authority intends to take. Company interlocks that raise competition concerns should generally be dissolved by the companies on their own initiative. Where necessary, the Bundeskartellamt will without delay institute proceedings to break up those joint ventures that are not compatible with competition law.

The final report is available (in German) on the website of the Bundeskartellamt.