ACCC calls for feedback on Red Paper takeover

Industry feedback on the proposed take-over by CPI Group Limited of Detagna Pty Ltd (Red Paper) is being sought by Printing Industries at the request of the Australian Competition and Consumer Commission (ACCC).

 

Printing Industries CEO Philip Andersen, said that the ACCC had not yet formed an opinion on the proposed acquisition. It has asked for industry feedback before it made a final decision on whether it will or will not approve the take-over.

"If there is sufficient industry interest then we will prepare a detailed report for the ACCC addressing the areas they are considering in assessing whether the purchase will affect competition in an important and substantial market," he said.

Industry feedback is being sought on the following:

1. How readily customers could switch from the merged firm to other domestic paper merchants for the supply of fine paper, and the reasons;

2. The extent to which customers could switch from the merged firm to offshore paper manufacturers for the supply of fine and copy paper, either directly or indirectly through mill agents and overseas paper merchants, and the reasons (having regard to product quality and range, pricing, lag time and any other practical constraints such as requirement of minimum order quantity);

3. The ability and incentive of new entrants to set up paper merchanting operations post acquisition, and the reasons (having regard to factors such as the size of the investment, particularly the proportion of that which is sunk, and access to domestic and offshore paper manufacturers);

4. Whether customers would have the ability and incentive to sponsor the entry of new paper merchants or to perform paper merchanting functions (such as procurement and warehousing) in-house, and the reasons;

5. Whether and, if so, how Red Paper is an especially vigorous and effective competitor (for example in terms of pricing, range of products stocked and the quality of service provided) and

6. Whether the proposed acquisition would increase the ability and incentive for reduced price and/or non-price competition between paper merchants operating in Australia.

Andersen said written responses should be provided to Printing Industries national office, 25 South Parade, Auburn 2144 by Wednesday 24 October 2007. Fax (02) 8789 7387 or e-mail: hagop@printnet.com.au

Inquiries should be directed to Hagop Tchamkertenian on (02) 8789 7361.