The Australian company ACI Packaging has been put under price surveillance by recommendation of the Australian Industry Commission after hearing of “considerable dissatisfaction” among its customers o…
The Australian company ACI Packaging has been put under price surveillance by recommendation of the Australian Industry Commission after hearing of “considerable dissatisfaction” among its customers over prices and service. In its latest report on packaging and labelling, the commission also recommended that the 5% tariff applying to steel tinplate be removed, exposing BHP“s tinplate operation to greater competition from imports. In a wide-ranging report, the commission also said there was cause to believe Australians generated “too much waste for our own good” and urged that landfill charges be increased to meet the full social cost. The commission rejected the submission of ACI Packaging, a subsidiary of BTR Nylex, which argued that improved efficiency explained the “significant” increases in returns seen since ACI acquired the Smorgon glass business in 1991 and moved to 99% of the glass packaging market. In its discussion paper, the commission pointed out that ACI had applied for 20 separate price increases in the four years to 1995 and price rises had averaged 7.98% for contract customers in the period. According to the report, ACI“s prices for some important commodities such as wine bottles are “substantially above prices available from firms with similar facilities in offshore markets.” The commissioners recognised that the barriers to entry to the glass container industry were high and that imports offered only limited competitive discipline because transport costs often represented 50% of the landed cost of glass containers.