The Australian Competition and Consumer Commission (ACCC) is concerned over plans by the billionaire Pratt family, who own Visy Plastics, to buy a rival company, because it could drive the price of plastic bottles up significantly.
Anthony Pratt, son of the late Richard Pratt now controls Visy, the company that made the family billions.
Now he want to buy up a packaging business owned by HP Plastics, which was put into administration in January.
But the consumer watchdog believe that if the takeover bid is successful, it would damage competition and pricing in the packaging sector.
In a preliminary review, the ACCC said the purchase of the Pact Group, owned by Richard Pratt’s son-in-law, Raphael Geminder ”may not provide an effective independent constraint on the merged firm”.
This is not the first time the ACCC has targeted the Pratt family; in 2009 it laid criminal charges against Richard Pratt and Visy.
He was found guilty of providing false and misleading evidence over incidents of price fixing with Amcor, and fined $36 million.
But in April of that year, the charges were dropped due to Pratt’s ill health and he died the following day.
Now the ACCC is concerned a similar situation could present itself again.
It said in a statement that it was concerned that the purchase of HP Plastics by Visy would result in an 80 per cent control of the market, which would significantly impact competition.
”The ACCC is considering the extent to which the proposed acquisition would allow Visy … to unilaterally, or in co-ordination with Pact, increase prices for the supply or PET bottles,” the ACCC’s statement said.
Coca-cola Amital has announced plans to manufacture its own bottles by 2015, and the watchdog believes that is partly behind the Pratt’s move, as it would allow Visy into a market of smaller batches of bottles, which is currently dominated by HP.
The ACCC is calling for further submissions from the market in response to the Statement of Issues by 15 March 2012 and a final decision will be deferred until 22 March 2012.
The Statement of Issues will be available on the public merger register on the ACCC’s website.