By Liz White, UT staffSydney-The Australian Competition and Consumer Commission is opposed to the proposed acquisition by Pacific Brands Ltd of Joyce Corp. Ltd, ACCC chairman, Graeme Samuel, said in a 2 March statement. “Market inquiries clearly showed that Dunlop Foams and Joyce are each other’s most significant market constraint,” said Samuel. “Either an existing competitor or a new entrant to the industry would need to invest substantially and secure a sufficient customer base in order to compete at a level with Dunlop Foams and Joyce and furthermore, to be in a position to constrain the merged entity.”The ACCC also considered whether imports of furniture and bedding would offer sufficient competition for a merged entity and found this would have a limited effect. Another concern the ACCC looked at was the outcome of vertical integration between Dunlop Foams and Dunlop Bedding. Dunlop Foams does not at present offer Dunlop Bedding lower prices and increased product development and innovation knowledge, “primarily because of the threat of losing customers to Joyce.” But post acquisition, “with no significant competition constraint, the merged entity will have the ability and the incentive to give Dunlop Bedding a competitive advantage over other domestic bedding manufacturers,” the ACCC concluded. “
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