‘Pact will face competitive constraint from other manufacturers’

ACCC will not oppose Pact’s acquisition of Power Plastics

By Jenny Eagle

- Last updated on GMT

Related tags Recyclable materials

ACCC will not oppose Pact’s acquisition of Power Plastics
The Australian Competition and Consumer Commission (ACCC) will not oppose the proposed acquisition of Power Plastics by a subsidiary of Pact Group Holdings.

The ACCC considered the proposal in the context of the manufacture and supply of polyethylene terephthalate (PET) containers (including PET jars, bottles and other containers) in New South Wales (NSW), Australia.

Second and third largest supplier

Also, the manufacture and supply of non-beverage rigid plastic containers (being non-PET containers including jars, bottles and other containers up to 10L in size using low-density polyethylene (LDPE), high-density polyethylene (HDPE), and polypropylene (PP)) in NSW.

Pact is the second largest supplier of PET containers in NSW, and Power Plastics is the third largest supplier.

While the ACCC concluded the proposed acquisition would be likely to lessen competition, we did not consider we had sufficient information to be satisfied this lessening of competition would be substantial​,” said Rod Sims, chairman, ACCC.

It claimed, following the proposed acquisition, Pact would continue to face some competitive constraint from other manufacturers in NSW and, to some extent, from Victoria and Queensland.

Other manufacturers of similar products are not as large as Pact or Power Plastics, but we consider some could possibly expand to meet customer requirements​,” added Sims.

Some customers may have the ability to sponsor expansion by smaller manufacturers, or alternatively to commence manufacturing the products in-house​.”

Rigid plastic food containers, PET & HDPE bottles

Pact is listed on the ASX and manufactures plastic and non-plastic packaging products. Its product range includes rigid plastic food containers, polyethylene terephthalate (PET) and high-density polyethylene (HDPE) bottles, jars, tubes, jerry cans, cubes, pails, plastic and steel drums, trays and closures.

Power Plastics is a NSW-based manufacturer of PET and non-beverage rigid plastic containers up to 5L.

The ACCC did not reach a definitive view on whether there was a single market for the manufacture and supply of PET containers or separate markets for those PET containers manufactured on two-stage equipment (such as PET beverage bottles) and PET containers manufactured on single stage equipment.

Its inquiries suggested competition for the manufacture and supply of non-beverage rigid plastic containers with capacity up to approximately 300ml may occur over a broader geographic region than competition for the manufacture and supply of larger containers.

These smaller containers can be stacked and shipped more efficiently than larger containers and have lower freight costs per unit.

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