Amcor to acquire competitor

The Australian Competition and Consumer Commission (ACCC) will not oppose the proposed acquisition by Amcor of Detmold Group’s Australian flexible packaging operation. Detmold competes with Amcor in the supply of value-added flexible packaging, particularly to manufacturers of fast moving consumer goods. This acquisition follows Amcor’s acquisition of Aperio Group in 2012, which was subject to a detailed ACCC review.

“The ACCC concluded that the acquisition of Detmold’s Australian flexible packaging operations would be unlikely to substantially lessen competition,” ACCC chairman Rod Sims said. “In reaching its decision, the ACCC determined that actual and potential import competition was likely to continue to provide a strong constraint on Amcor following the acquisition,” Sims said.

Market inquiries confirmed that FMCG manufacturers across a range of sectors can, and do successfully manage their supply chain through importing value-added flexible packaging. Importers also have a growing presence in Australia and are able to offer warehousing, technical and sales staff to assist customers manage an import supply chain. The ACCC’s review indicated that customers of value-added flexible packaging frequently benchmark local suppliers’ pricing against the cost of imported product and used the threat of switching some or all of their value-added flexible packaging to imports to obtain price reductions from their incumbent supplier.

“Local manufacturers of flexible packaging can also provide an important competitive constraint on large firms. However market inquiries did not indicate that Detmold had been a particularly effective competitor nor had it received widespread customer support,” Sims added.

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