Rising import competition is a major reason behind the Australian Competition and Consumer Commission's decision not to intervene in Caroma's acquisition of the Fowler Bathroom Products Division of James Hardie Industries Ltd. "In making its decision, the ACCC took into account the increasing number of importers selling in the Australian market, particularly those based in low-cost South-East Asia," ACCC Chairman, Professor Allan Fels, said today. "Also, the ACCC's inquiries found that Caroma's selling price was responsive to its competition".
Caroma is part of the GWA International Ltd manufacturing group. It produces a range of bathroom products including vitreous china toilets and basins. Fowler is the only other Australian manufacturer of vitreous china toilets and basins. Professor Fels said a large number of South-East Asian-based producers had excess production capacity.
"The ACCC expects that there will be more imports in the future. "The ACCC also considered that plumbing distributors could exercise some countervailing power with Caroma after the acquisition. "The ACCC has told Caroma it will closely monitor the market over the next few years with special attention paid to any price increases in Caroma products. It will also monitor the development of Caroma's relationship with Australian plumbing distributors.
"During market inquiries, concerns were raised about Caroma's place on the technical committees which draft Australian plumbing fixtures standards. In particular, it was feared Caroma would 'inherit' Fowler's positions on these committees and be able to unduly influence the standards in its favour. "Caroma has responded by offering to withdraw two representatives from the committees so its representation is the same as that of importers of toilets and basins. "It has offered, and the ACCC accepted, court-enforceable undertakings that the resignations will occur within 21 days of Fowler's acquisition."
Further information Professor Allan Fels, Chairman, pager (016) 373 536 Ms Lin Enright, Director, Public Relations, (06) 264 2808
Caroma is part of the GWA International Ltd manufacturing group. It produces a range of bathroom products including vitreous china toilets and basins. Fowler is the only other Australian manufacturer of vitreous china toilets and basins. Professor Fels said a large number of South-East Asian-based producers had excess production capacity.
"The ACCC expects that there will be more imports in the future. "The ACCC also considered that plumbing distributors could exercise some countervailing power with Caroma after the acquisition. "The ACCC has told Caroma it will closely monitor the market over the next few years with special attention paid to any price increases in Caroma products. It will also monitor the development of Caroma's relationship with Australian plumbing distributors.
"During market inquiries, concerns were raised about Caroma's place on the technical committees which draft Australian plumbing fixtures standards. In particular, it was feared Caroma would 'inherit' Fowler's positions on these committees and be able to unduly influence the standards in its favour. "Caroma has responded by offering to withdraw two representatives from the committees so its representation is the same as that of importers of toilets and basins. "It has offered, and the ACCC accepted, court-enforceable undertakings that the resignations will occur within 21 days of Fowler's acquisition."
Further information Professor Allan Fels, Chairman, pager (016) 373 536 Ms Lin Enright, Director, Public Relations, (06) 264 2808