Greif Inc and Blagden Packaging Group

📖 The Scoop

Greif UK Ltd is the largest manufacture of new large steel drums in the UK. On 30 November 2006 Grief UK acquired the new steel drum and closure businesses of Blagden Group, which was the second-largest producer of new steel drums in the UK. The merged businesses' combined share of supply of new steel drums in the UK is 85 per cent. Steel drums are the most widely-used form of large rigid industrial packaging, used in a range of industry sectors to package, transport and store a variety of substances. Demand for them has been declining, due to demand for less packaging and competition from plastic drums and intermediate bulk containers. The merger has resulted in a highly concentrated market, and has removed the main competitive restraint on Greif's prices and future behaviour. The Commission then examined what other developments might prevent the merged entity from exploiting its market position and increasing prices to customers. Schètz Group in the Netherlands is building a new large steel drum line, and the Commission feels that imports from there could be competitive. Other entrants into the market are thought unlikely. Recent developments in multi-layer plastic extrusion and coating techniques could allow more products to be packed in plastic containers. Suppliers of alternative packaging have invested in increased capacity so this might be a stronger competitive restraint in future. The Commission does not expect a substantial lessening of competition (SLC) to result from the merger.

Genre: Business & Economics / General (fancy, right?)