Amcor's Aperio acquisition to cost market

The Australian Manufacturing Workers’ Union (AMWU) has warned the possible takeover of packaging specialist Aperio Group by rival Amcor would lead to less competition in the market and cost hundreds of jobs.
 
Amcor proposed the acquisition of Aperio in late 2011, but the takeover has been the subject of a delayed review by the Australian Competition & Consumer Commission (ACCC).
 
ACCC’s report into the Amcor acquisition of Aperio has been delayed several times, and the commission has recently called for more input from the market on ‘certain competition issues which have arisen from the ACCC's review to date’. A new deadline of March 8 has been set for submissions, with ACCC's final decision deferred until March 29.
 
AMWU national print division secretary Lorraine Cassin submitted her thoughts on the potential deal to the ACCC, and said: ‘We see the move by Amcor as one of eliminating a competitor rather than the acquisition of an asset to benefit the market.

‘Amcor has ample capacity in flexible packaging having increased capacity in Asia. We do not see that the acquisition of Aperio would lead to increased or more effective competition resulting in lower prices for consumers or business, or better or more timely delivery of services.’

'We believe diversity needs to be retained in the packaging sector'

Cassin’s submission added that Amcor would dominate the flexible packaging market in the region through the acquisition of Aperio, with the two combined accounting for more than 40 percent of the market share. AMWU said there are four key players in Australia’s plastic bag and film manufacturing market, including Amcor and Aperio, with the combined market share more than double that of its other two competitors added together.

It would also put several hundred jobs at risk, with Aperio employing 550 members of staff across Australia, AMWU said.
 
‘This level of market concentration is likely to limit competitive pressure in the market. We believe diversity needs to be retained in the packaging sector,' Cassin said.

‘The synergies and savings through cost reduction and redundancies when combined with market concentration would allow excess profits to be earned given the lack of discipline from market forces.’