The Australian Competition and Consumer Commission will oppose Pact Group's proposed acquisition of Brickwood, ACCC Chairman, Mr Graeme Samuel, said today.
Pact Group had requested informal merger clearance in relation to the proposed acquisition of the packaging business of Brickwood Holdings Pty Ltd, Logan Moulders Pty Ltd, Full View Plastics Pty Ltd and the units in the Full View Plastics Unit Trust (together Brickwood).
"After comprehensive investigation and consideration of information provided by Pact Group, Brickwood and many other market participants, including customers, competitors, and suppliers, the ACCC has formed the view that the proposed acquisition is likely to substantially lessen competition for the manufacture and supply of PET bottles in Queensland, New South Wales and Victoria," Mr Samuel said.
"Pact Group, Visy and Brickwood are significant suppliers of PET bottles in Australia. The largest PET bottle customers in Australia are large beverage suppliers and these customers are predominantly supplied by Visy and Brickwood. In its assessment, the ACCC had regard to the commercial and family relationships between Pact Group and Visy, and their potential impact on the effectiveness of competition between Visy and Pact Group in the supply of PET bottles post acquisition.
"Industry participants confirmed that Brickwood is the only alternative to Visy in the large scale manufacture and supply of PET bottles. Smaller PET bottle suppliers are unlikely to impose a significant competitive constraint on the merged entity and Visy.
"Market inquiries revealed that there are significant impediments to reaching large scale manufacture and supply of PET bottles and that in-house manufacturing is an insufficiently viable option for large beverage suppliers such that an effective competitive constraint is likely to be imposed on the merged entity and Visy," Mr Samuel said.
The ACCC will issue a Public Competition Assessment on its decision in due course.