The Australian Competition and Consumer Commission has announced that it will not oppose the proposed acquisition of Amcor Ltd of Detmold Group’s Australian flexible packaging operation.
“The ACCC concluded that the acquisition of Detmold’s Australian flexible packaging operations would be unlikely to substantially lessen competition,” said ACCC Chairman Rod Sims in a statement.
“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.”
Detmold Flexibles produces high-quality flexible packaging for fast-moving consumer goods and industrial markets. The company operates two plants in Melbourne and has sales of approximately $55 million.
Detmold competes with Amcor in the supply of value-added flexible packaging particularly to manufacturers of FMCG.
In November Amcor CEO and Managing Director, Ken MacKenzie said the deal will strengthen their value proposition in the local market by boosting their capacity for innovation.
“From a strategic perspective Detmold Flexibles builds on the success of the 2012 Aperio Group acquisition. It enables the Australian flexibles business to strengthen their manufacturing centres of excellence with plants focussed on specific technologies and end market segments,” said MacKenzie.
Market inquiries confirmed that FMCG manufacturers across a range of sectors successfully manage their supply chain through importing value-added flexible packaging, according to the ACCC media release.
The Commission’s review indicated that customers of value-added flexible packaging often benchmark local suppliers’ prices against the cost of imported products. They also threaten to switch from 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.” Mr Sims said.
“However market inquiries did not indicate that Detmold had been a particularly effective competitor nor had it received widespread customer support.”