Wednesday, April 16, 2003

Antitrust news

The Justice Department’s Antitrust Division has filed suit to block the acquisition of a unit of Bermis Co. by Finland-based UPM-Kymmene. DOJ officials are concerned the deal will lead to improper consolidation of the market for sticky labels. Yes, that’s right, sticky labels.

(This shouldn’t surprise me, given that last month a federal appeals court ruled 3M was unfairly monopolizing the market for generic tape. Adhesives have apparently become the Standard Oil of modern antitrust practice.)

This case is interesting because European Union antitrust regulators—normally a far more anal bunch than the DOJ—gave its blessing to the deal, finding the merged firms would pose no threat to the current sticky label leader, U.S.-based Avery Dennison. The DOJ, however, offers the bizarre claim that a Bermis-UPM merger might “facilitate coordination” with Avery and other U.S. competitors. In other words, the government is afraid sticky label producers will “coordinate” rather than “compete.” Oh, the sheer horror.

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