Comp Com won't allow packaging mergers

File picture: Sxc.hu

File picture: Sxc.hu

Published Jan 19, 2017

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Johannesburg - The Competition Commission on Thursday prohibited two mergers whereby KwaZulu-Natal-based packaging giant, Corruseal Group, intended to acquire two privately-owned sheet board makers, Boxlee and Pride Pak Packaging.Corruseal owns varying interests in several businesses, most of which operate in the industry for the manufacture and supply of packaging products including containerboard paper, corrugated board as well as corrugated packaging. 

Johannebsurg-based Boxlee and Pride Pak manufacture and supply corrugated boxes and packaging, including single face board, regular slotted containers, dye cut self-erecting containers and trays.

The merger assessment primarily focused on coordinated effects likely to arise in the market for the manufacture and supply of corrugated board and in the market for the manufacture and supply of corrugated packaging.

 

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The Commission said it particularly conducted this assessment in light of ongoing collusion investigations in the industry and in the affected markets.

The Commission also said it found that the industry and the affected markets were characterised by high levels of concentration along the value chain, market transparency, multi-market contact, high and increasing barriers to entry, amongst other considerations.

Therefore the Commission found that the proposed transactions were likely to substantially prevent or lessen competition as a result of strengthened coordination in the affected markets.

"There are significant concerns that the proposed mergers would make the market more conducive to coordination on prices by firms in the corrugated board and packaging markets," deputy commissioner, Hardin Ratshisusu said in a statement. 

"Further concentration in these markets would significantly lessen competition to the detriment of consumers." 

AFRICAN NEWS AGENCY

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