PIAA has made a submission to the ACCC, urging it not to block the proposed merger between print giants PMP and IPMG.
Mary-Jo Fischer, director of government relations, PIAA, says “It is fair enough for the ACCC to ask the questions, but no, we do not think they should be concerned. The merger will not lessen competition, it will increase competition with more investment, and the prospect of bringing jobs back from overseas.”
The ACCC’s concerns centre around the possibility of reduced competition in heatset web offset printing, and the potential foreclosure of rival distributors.
PIAA is responding to these concerns, with Andrew Macaulay, CEO, noting ‘’Particularly in the catalogue market, customers are dominated by chain stores, such as supermarkets and merchandise stores. These customers hold the whip-hand. They are strong negotiators who decide how, when and where the print product will be supplied.’’
Macaulay is blunt in his assessment of the impact on the rest of the industry of a knockback, he says, “An ACCC blockage would lock the market in its present state – lacking in efficiency, with excess capacity and obsolete equipment. In so doing, the ACCC would be consigning the market and the industry to the past’’, says Macaulay.
Macaulay says that the merger will not materially affect price or service levels, because of the market-power wielded by these customers.
In its submission, PIAA says, ‘’These customers will not hesitate to use overseas print companies or indeed finance expansion or new entrants into the marketplace to get the best price possible for the products they want.’’
The submission also notes that the proposed merger would allow the merged companies to tackle the issues of excess capacity and obsolete or duplicated equipment on the market. PIAA says this excess is ‘a direct result of ongoing decisions made by print customers to reduce the quantities of print they order. It is a result of decisions made by others and therefore outside the ‘control’ of individual print businesses’.
“We are supportive of the ACCC’s work. We have had a number of constructive meetings with them, and we have been giving them a forthright opinion of the industry. They have asked for the peak body, the organisation that is best placed to speak for the industry impartially, because we have the capacity to say how it will affect the industry across the board,” says Macaulay.
The two companies proposed a merger 15 years ago, which was refused by the ACCC.
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