Bidpaper Plus (Pty) Ltd v Sprint Packaging (Pty) Ltd (17/LM/Apr10) [2011] ZACT 1 (10 January 2011)

Bidpaper Plus (Pty) Ltd v Sprint Packaging (Pty) Ltd (17/LM/Apr10) [2011] ZACT 1 (10 January 2011)

The Tribunal found that, under both the merging parties' and the Commission's approaches to market definition, the proposed merger does not raise competition concerns. In the manufacturing of flat bottom paper packaging, although the merged entity would have a high market share, the presence of significant competitors and customer countervailing power mitigate any risk of substantial lessening of competition. The market investigation revealed excess production capacity among competitors, enabling them to increase output without additional investment. Customers, including large retail and fast food chains, have the ability to switch suppliers and did not raise concerns. No evidence was...

Citation
[2011] ZACT 1
Parties
Applicant: Bidpaper Plus (Pty) Ltd; Respondent: Sprint Packaging (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
10 January 2011
Case Number
17/LM/Apr10
Procedural Posture
Merger Application / Reasons for Decision
Outcome
The proposed merger is approved unconditionally.
Judges
Norman Manoim, Yasmin Carrim, Andreas Wessels
Legal Topics
Merger Control, Horizontal Overlap, Vertical Dimension, Market Definition, Public Interest, Barriers to Entry
Competition Law Commercial and Corporate Merger Control Horizontal Overlap Vertical Dimension Market Definition Public Interest Barriers to Entry

Case Brief

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Parties

Bidpaper Plus (Pty) Ltd

Applicant

Sprint Packaging (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Reasons for Decision

Legal Issues

  1. 1 Does the proposed merger between Bidpaper Plus and Sprint Packaging substantially prevent or lessen competition in any relevant market?
  2. 2 Are there any public interest concerns arising from the transaction, including employment effects?
  3. 3 Is it necessary to define the exact parameters of the relevant product and geographic markets for this merger?

Ratio Decidendi

The Tribunal found that, under both the merging parties' and the Commission's approaches to market definition, the proposed merger does not raise competition concerns. In the manufacturing of flat bottom paper packaging, although the merged entity would have a high market share, the presence of significant competitors and customer countervailing power mitigate any risk of substantial lessening of competition. The market investigation revealed excess production capacity among competitors, enabling them to increase output without additional investment. Customers, including large retail and fast food chains, have the ability to switch suppliers and did not raise concerns. No evidence was...

Court Disposition

The proposed merger is approved unconditionally.

Orders

  • The merger between Bidpaper Plus (Pty) Ltd and Sprint Packaging (Pty) Ltd is approved without conditions.