Book printers and publishers cry foul at PMP and McPherson's merger

Concerned that the merger, announced in May this year will reduce competition, the ACCC is investigating the effects of the partnership especially on long-run offset book printing.

According to the ACCC there is only one other printer in the web-fed offset book printing market, Ligare, which was recently the subject of a private equity takeover. The initial inquiry found the presses used by the joint venture partners, Timson high-speed web presses, are significantly more efficient for longer print
runs than the web-presses operated by Ligare.

The aspects of the deal that concern the consumer watchdog are that the joint venture will remove the principal source of competitive constraint for larger print runs of mono books, and that it may have an ability and incentive to negotiate more comprehensive 'grid' contracts with publishers, limiting the ability for other printers to compete for shorter print runs. (Grid contracts generally require that all work done in Australia in certain formats be done with
the contracted printer.) However, the ACCC said that "the proposed acquisition is unlikely to raise concerns in relation to the production of mono books using digital technology."

The consumer watchdog is also seeking information on the costs that publishers would incur if they were to undertake offshore printing, the extent to which these constraints apply to colour book printing, the reasons why colour book printing has been shifted offshore and the proportion of mono printing for which imports would not be considered viable.

The ACCC is currently seeking submissions from market participants on the issues raised. It will publicly announce its final opinion of 18 July.

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