Introduction
The GCRA undertook this market study to better understand how the concrete and aggregate markets are working in Guernsey, and whether they are delivering fair outcomes for consumers, businesses, and the wider economy. The study considers market structure, pricing, profitability, and the conditions for effective competition, with the aim of providing clear findings and practical recommendations where improvements may be needed. The market study does not focus on other areas of the construction market, solely on concrete and aggregate products.
You can download the redacted version of the Concrete Market Study Report and read a one page summary. Confidential information, including commercially sensitive financial data, has been removed and, where appropriate, replaced with the relevant range into which the data falls.
Why this market study was commissioned
The construction sector plays a critical role in Guernsey’s economy. It contributes to the quality of life of all islanders by building places we all need, like schools, hospitals and housing. That’s why the cost of construction matters to us all.
Concrete and aggregates sit at the very start of the construction supply chain, so when prices are high - the effects are felt everywhere - from housing affordability to the cost of public infrastructure.
The Committee for Economic Development formally asked the GCRA to carry out an examination of prices of concrete and aggregates in Guernsey, and those terms of reference have guided this study. The report responds to that request and is informed by interviews with key stakeholders and evidence.
What the market looks like in practice
- Ready-mix concrete (RMX) can only be supplied locally and must be used within hours of being mixed.
- Guernsey has one concrete batching plant, owned by Ronez.
- As a result, Ronez is the only supplier of RMX on the island.
This is not a recent or accidental situation. Studies going back more than 20 years reached the same conclusion: Guernsey is too small for two permanent RMX suppliers to compete sustainably.
For policymakers, this is an important distinction:
Ronez’s position is not the result of exclusionary behaviour — it is the result of geography, scale, and economics.
Other products: more choice, but still limited
- For concrete blocks and pre-cast products, there are alternatives, but importing these is costly.
- Smaller builders tend to rely heavily on Ronez.
- Aggregates face more competition than RMX, with some imports available.
Are prices high compared to the UK?
Yes — and significantly so.
The review confirms that many concrete and aggregate products in Guernsey cost much more than comparable UK products. In some cases, prices are 100% higher .
However, higher prices alone do not mean unfair pricing.
Why “higher” does not automatically mean “excessive”
Guernsey suppliers face structurally higher costs than UK suppliers, including:
- Shipping raw materials
- Higher labour costs
- Smaller production volumes (no economies of scale)
- Lack of nearby quarry infrastructure
- Free services that UK suppliers often charge for separately
The key policy question is therefore not:
“Are prices higher than the UK?”
But rather:
“Are prices excessive and unfair?”
Deep-diving profitability
What the profitability analysis shows
To answer that question, the review examines profitability - not just prices.
What was tested
- Whether Ronez’s returns exceed its cost of capital
- Whether high profits are persistent and structural, rather than temporary
What was found
- Both Ronez's returns and its cost of capital are in the range 10 -19.99%*
- Profits increased in recent years, particularly for RMX and concrete products
- However:
- The period examined is relatively short (around three years)
- Construction is cyclical
- Price increases broadly tracked or lagged UK trends
The crucial legal point
Under competition law, to establish unlawful excessive pricing:
- Returns must be:
- Clearly disproportionate
- Persistent over time
- The price must be “unfair”
That threshold is intentionally high - and the evidence does not meet it.
*Redacted
Assessment of Ronez against Excessive Pricing Indicators
Below is a structured assessment of the indicators typically examined in excessive pricing cases, comparing those past cases against this market study.
Magnitude of Price Increase
Pharmaceutical cases:
Price increases of 300% to over 6,000%, in some instances implemented overnight or through very large step changes.
Ronez (2021 baseline = 100):
Ready-Mix Concrete (RMX):
+9% (2022), +10% (2023), +14% (2024)
Cumulative: ~37%
Concrete Products:
+11% (2022), +7% (2023), +16% (2024)
Cumulative: ~38%
Aggregates:
+20% (2022), +20% (2023), +10% (2024)
Cumulative: ~58%
The increases are materially smaller in scale than those relied upon in infringement decisions.
Speed and Pattern of Increase
Unlawful cases:
Abrupt or extreme step-change increases (e.g. 2,000% overnight).
Ronez:
Increases occurred progressively over three years.
The largest single annual increase observed was 20% (aggregates).
No evidence of sudden or extreme price shocks of the type seen in infringement cases.
Link to Underlying Costs
Unlawful cases:
Little or no increase in production costs despite very large price increases.
Ronez:
Evidence of increased input and operating costs over the relevant period.
Price movements occurred during a period of wider cost inflation affecting materials, labour and logistics.
Price increases at least partly attributable to rising unit costs.
Rate of Return vs Cost of Capital
Infringement cases:
Returns far in excess of cost of capital, often multiples of competitive benchmarks and sustained over long periods.
Ronez:
ROCE and WACC in the range 10-19.99%*.
Differential in the range 5-9.99%* over a three-year period.
* Redacted
Differential present but not extreme in magnitude or duration.
Duration of Elevated Returns
Infringement cases:
Persistent supra-competitive returns over extended periods (often 5–10+ years).
Ronez:
Elevated ROCE observed over approximately three years.
Relatively short period, particularly in a cyclical and capital-intensive sector.
Evidence of Exploitative Conduct
Unlawful cases:
Evidence of opportunistic de-branding, regulatory arbitrage, threats to withdraw supply, or deliberate imposition of extreme price increases.
Ronez:
No evidence of withdrawal threats, strategic supply restriction, or abrupt price shocks.
No evidence of exploitative conduct of the type typically associated with abuse findings.
Frequently Asked Questions
What’s this report about?
This GCRA report looks at whether concrete and aggregate prices in Guernsey are too high and whether anything unusual or unfair is going on in this market.
Why did the Committee ask for this study?
The Committee were worried that the price of concrete and aggregates in Guernsey were too high. Expensive building materials can push up housing costs, make construction projects more expensive and slow down development. And if government building projects are too expensive, this hits the Guernsey taxpayer too.
Did the GCRA find a problem here?
The report confirms that concrete prices in Guernsey are higher than in the UK. But high prices on their own don’t mean that anyone has broken the competition law. There could be structural reasons for Guernsey prices being higher than UK prices. For example, everything has to be shipped into Guernsey, labour costs are higher and the Guernsey market is really small. The question is whether anything can be done to improve things, despite these structural problems.
So, is the GCRA saying everything is fine?
No. We found that the reasons for the high prices are likely to be structural and not down to anti-competitive behaviour. But it’s clear that these structural factors are leading to market outcomes that are bad for consumers. Expensive building materials could mean higher housing costs, public projects costing more, with a knock-on effect for taxpayers, and even developments getting delayed or cancelled. So action is required but the solution will lie not in legal enforcement but rather in policy and market-shaping measures.