By Kate Tilley | PLASTICS NEWS CORRESPONDENT
Posted February 23, 2012 SYDNEY, AUSTRALIA (Feb. 23, 1 p.m. ET) -- A major Australian trade union has told Australia’s competition watchdog that Amcor Ltd.’s proposed acquisition of flexible packaging supplier Aperio Group Australia Pty. Ltd. should not go ahead because it will cause significant job losses.
The Australian Competition and Consumer Commission (ACCC) is investigating whether global packaging supplier Amcor’s proposed acquisition will lessen competition in the market.
Even if Melbourne-based Amcor gets ACCC approval to proceed with the purchase, it will have to outbid other buyers that have shown interest in taking over Melbourne-based Aperio.
ACCC released a statement Feb. 23 seeking further information on “certain competition issues” that have so far arisen from its review. Stakeholders have until March 8 to make further submissions. ACCC’s final decision will be deferred to March 29.
A final report was initially due for release Jan. 25 but has been delayed three times.
The Sydney-based Australian Manufacturing Workers Union (AMWU) represents more than 100,000 workers in the metal, vehicle, food, technical, automotive, print and packaging manufacturing industries. It has members at both Amcor and Aperio.
“We see the move by Amcor as one of eliminating a competitor, rather than the acquisition of an asset to benefit the market,” AMWU said in its submission to ACCC
“We do not see the acquisition of Aperio would lead to increased or more effective competition, resulting in lower prices for consumers or businesses, or better or more timely delivery of services. We see the likely outcome as job losses for Aperio members.”
The submission said Aperio employs about 550 employees, so job losses will have “significant direct and flow-on effects.”
It warned cost reductions and redundancies will earn Amcor excess profits. “We are not convinced any import pressures will provide those competitive pressures.”
AMWU said there are four main competitors in Australia’s plastic bag and film manufacturing market. Amcor has a 22 percent to 25 percent market share; Aperio 16 percent to 18 percent; Melbourne-based Sealed Air Australia (Holdings) Pty. Ltd. 16 percent; and Melbourne-based Innovia Films (Asia Pacific) Pty. Ltd. three percent.
“Any acquisition by Amcor of Aperio would see its market share rise to 38 percent to 43 percent; more than double the other two players.” The union said any player with more than 40 percent market share will have the ability to exert “upward pressure” on prices.
“We believe diversity needs to be retained in the packaging sector so competitive pressures are retained,” AMWU’s submission said.
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