ACCC chairman Graeme Samuel told the two companies that the merger would result in the new entity having total dominance in the mono offset market, which was unacceptable to him. The printers pointed in vain to overseas printers as real competition to the proposed new company, but the ACCC said that delivery schedules would render much of that competition ineffective.
Samuel said that the two printers were the only Australian companies capable of servicing the needs of medium to large size publishers for their mono print runs, and that allowing the proposal to go ahead would take competition out of the market and may lead to price increases.
He said, "After comprehensive investigation and conducting inquiries with industry participants, the ACCC has formed the view that the proposed joint venture is likely to substantially lessen competition for the supply of mono (black and white) offset book printing. The ACCC has particular concerns in relation to the trade (fiction and non-fiction or 'read-for-pleasure') segment of the market.
"Griffin and McPherson's currently service the bulk of the domestic mono print requirements of Australia's medium and large trade publishers. They are the only two printers in the Australian market capable of competing across the full range of services required by publishers.
"Industry participants noted that Griffin and McPherson's currently compete vigorously to supply mono book printing services to publishers. A significant number of publishers expressed concerns about the impact of the proposed joint venture on the terms and conditions under which they would be able to source their printing requirements.
"While publishers print some books offshore (particularly colour books), and directly import others, market inquiries indicated that imports, both in terms of offshore printing and direct importation are unlikely to significantly constrain the joint venture. A substantial proportion of books printed in Australia have publishing requirements that are time sensitive and relying on imports for these titles would impose significant additional costs on publishers.
"The ACCC considers that entry or expansion into the market on the scale of Griffin or McPherson's is unlikely because of the size of the capital investment required relative to the size of the industry and because of existing excess capacity in the industry.
"The ACCC considers that the reduction in competitive tension in the market through the proposed joint venture will likely lead to higher book printing prices (or lower service conditions) for publishers, and, ultimately consumers."
Quite how the two book printers, who now presumably know an awful lot about each other, will move forward is not yet known. Griffin is owned by PMP, while McPherson's is a public company.
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