The South African Competition Tribunal hears arguments for merger which would result in a 90% share in the market for steel drums (Greif / Rheem)

Abstract In this paper, we use a differentiated- products oligopoly model to assess the impact on competition of a merger between Greif and Rheem South Africa. Both parties are active in the industrial packaging products sector. The parties’ activities overlap, among others, in the production of large steel drums. Our analysis suggests that there is a low degree of substitutability between large steel drums and other products in the market. For this reason, we focus our competitive assessment on the unilateral effects of large steel drums. We use two empirical tools, the upward pricing pressure (UPP) and the gross upward pricing pressure index (GUPPI). These two measures are complementary in assessing the competitive harm that the merger could induce. UPP nets out the incentive to

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Authors

  • Toulouse School of Economics
  • University of Witwatersrand (Johannesburg)
  • European University Institute (Florence)

Quotation

Marc Ivaldi, Liberty Mncube, Marina Sánchez del Villar, The South African Competition Tribunal hears arguments for merger which would result in a 90% share in the market for steel drums (Greif / Rheem), 31 January 2019, e-Competitions January 2019, Art. N° 93493

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