Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Canada clears combination of aluminum foil and packaging suppliers, (Jun 3, 2014)

By Jeffrey May, J.D.

The combination of two U.S.-based suppliers of aluminum foil wrap and semi-rigid aluminum containers—Reynolds Consumer Products, Inc. and the Novelis Foil Products North America division (NFP) of Novelis Inc. and Novelis Corporation—is unlikely to result in a substantial lessening or prevention of competition, the Canada Competition Bureau has decided. Yesterday, the agency released a statement, explaining why it issued a No Action Letter to Reynolds regarding the transaction on May 26.

In November 2013, Novelis, Inc.—a self-described world leader in aluminum rolling and recycling—announced the sale of its North American consumer foil products business to Reynolds. The transaction included foil manufacturing plants in Toronto and Vancouver, in addition to sales offices and distribution facilities located in Montreal and Mississauga, as well as LaGrange, Georgia.

According to the Canada Competition Bureau, both Reynolds and NFP manufacture and supply aluminum foil wrap and aluminum food packaging containers. The Competition Bureau’s review focused on the overlap between the parties with respect to the supply of aluminum foil wrap to Canadian retailers, specifically grocers and mass merchants, as well as the supply of semi-rigid aluminum containers, such as pie plates, to food-service and food processor companies.

The Competition Bureau determined that the transaction was unlikely to result in a substantial lessening or prevention of competition for the supply of aluminum foil wrap to Canadian retailers. Reynolds’ presence in Canada did not have a noticeable impact on the price at which NFP supplied aluminum foil wrap to Canadian retailers. For purposes of determining the relevant market, the Competition Bureau found that other forms of food wrap were not substitutable for aluminum foil wrap. In this case, it was not necessary to determine conclusively whether branded aluminum foil wrap and private label aluminum foil wrap were in the same or separate relevant product markets.

The Competition Bureau also concluded that the transaction is unlikely to result in a substantial lessening or prevention of competition for the sale of semi-rigid aluminum containers to food processors and food service companies. It was not necessary to determine conclusively the relevant product market, according to the statement, because many competitors existed for the supply of these products and there were no significant barriers for competitors to expand their product offerings in Canada.

Companies: Novelis Inc.; Reynolds Consumer Products, Inc.

News: Antitrust