ACCC not to oppose Detmold Flexibles acquisition

Detmold Flexibles operates two plants in Melbourne and competes with Amcor in the supply of value-added flexible packaging, particularly to manufacturers of fast-moving consumer goods (FMCG).

Amcor announced plans to acquire Detmold Flexibles in November last year for 50 million AUD, and to integrate the business into Amcor Flexibles Asia Pacific.

At that time, Amcor chief executive officer and managing director Ken MacKenzie said: ‘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 focused on specific technologies and end market segments.’

Amcor’s acquisition of Aperio Group in 2012 was also subject to a detailed ACCC review, which likewise concluded that any deal was unlikely to lessen competition.

In regard to Detmold Flexibles, ACCC said imports of value-added flexible packaging would likely ‘continue to provide a strong constraint on Amcor following the acquisition’.

‘ACCC concluded that the acquisition of Detmold’s Australian flexible packaging operations would be unlikely to substantially lessen competition,’ said commission chairman Rod Sims.

‘In reaching its decision, ACCC determined that actual and potential import competition was likely to continue to provide a strong constraint on Amcor following the acquisition.’

Market inquiries confirmed that FMCG manufacturers across a range of sectors can, and do, successfully manage their supply chain through importing value-added flexible packaging. Importers have a growing presence in Australia, ACCC said, and are able to offer warehousing, technical and sales staff to assist customers in managing 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,’ said Sim. ‘However market inquiries did not indicate that Detmold had been a particularly effective competitor nor had it received widespread customer support.’