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 flexible packaging to manufacturers of fast moving consumer goods.
The acquisition follows Amcor’s acquisition of Aperio Group in 2012, which was subject to a detailed ACCC review.
“The ACCC concluded the acquisition of Detmold’s Australian flexible packaging operations would be unlikely to substantially lessen competition,” said Rod Sims, chairman, ACCC.
“In reaching its decision, the ACCC determined actual and potential import competition was likely to continue to provide a strong constraint on Amcor following the acquisition.”
Market inquiries confirmed FMCG manufacturers across a range of sectors can, and do, successfully manage their supply chain through importing flexible packaging.
Importers also have a growing presence in Australia and can 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,” added Sims.
“However market inquiries did not indicate Detmold had been a particularly effective competitor nor had it received widespread customer support.”