Postal worker union says prices will rise if Staples acquires Office Depot
Source: Sun Sentinel
By Marcia Heroux Pounds
a report released Thursday, the American Postal Worker Union argued that Staples' planned $6.3 billion acquisition of Boca Raton-headquartered Office Depot would hurt American businesses if regulators allow it to proceed.
The report titled "Bad for Business" predicts "prices will go up and choices will go down" for commercial customers that make bulk supply purchases by contract.
Others have made the same argument in protests to the Federal Trade Commission, which has agreed to decide by Dec. 8 whether to allow or block the merger.
Office Depot spokeswoman Karen Denning and Staples spokesman Kirk Saville both said Thursday they had no comment on the report.
FULL story at link. Video: http://www.sun-sentinel.com/features/deals-shopping/sfl-staples-to-acquire-office-depot-for-63-billion-20150204-premiumvideo.html
Press release. New Report Says Staples/Office Depot Merger is Bad for Business
Office Supply Monopoly Will Harm both Small and Large Firms, Says Study from
American Postal Workers Union
Divesting Assets Cant Cure Damage Caused
by Combining #1 and #2 Office-Supply
Superstore Chains
WASHINGTON, DC The American Postal Worker Union released Bad for Business today, an analysis of how the proposed Staples/Office Depot merger would hurt American businesses if approved by federal regulators. The report studies the impact of a proposed merger of Staples and Office Depot, Americas largest and second largest office-supply superstore chains, on business-to-business transactions.
Bad for Business analyzes the contract market, where businesses place bulk orders for office supplies. If regulators allow Staples and Office Depot to merge, the report finds:
Prices will go up and choices will go down. Thats the inevitable result of creating a monopoly in an important sector of the economy.
If you put these two giants together, it would be like Bambi vs. Godzilla for anyone left in the market, said Mark Dimondstein, president of the American Postal Workers Union. Anybody else who sells or tries to sell office supplies would be tiny compared to the behemoth that Staples and Office Depot want to create and that would eliminate any real competition.
A combined Staples and Office Depot would have over $14 billion in annual sales to business customers in North America nearly 14 times greater than its nearest competitor.
Anti-trust regulators around the world are concerned about the impact of the proposed merger on market competition. In addition to the review by the Federal Trade Commission in the United States, the European Union has opened an in-depth investigation (after an initial finding that the merger could be anti-competitive).
Rumors suggest that the two companies may attempt to win regulatory approval by offering to divest some holdings, such as assets of the former OfficeMax, which Office Depot absorbed in 2013.
Market data analyzed by APWU in Bad for Business, however, shows that divestiture couldnt cure the harm that would be caused by combining the largest and second largest office-supply superstore chains.
According to Bad for Business, even if the merged companies were to divest former OfficeMax holdings, the new combined entity would still dwarf its nearest competitor. The competitive balance would not improve, and large and small businesses could be held hostage to price hikes, supply interruptions and other negative consequences of monopoly control of commodities that are essential for day-to-day business operations.
Once youve created a monopoly, you cant fix it by slicing off one small piece, Dimondstein said. The right approach is to prevent a single company from controlling an entire market in the first place. Thats why we have anti-trust laws and we believe those laws should be rigorously enforced.
Bad for Business follows up on No Sale, an earlier APWU report that focused on the impact of the proposed Staples/Office Depot merger on retail consumers. The APWU will submit its new report to the Federal Trade Commission and Department of Justice and will continue to share its legal and economic conclusions with state officials, investors, key shareholders and other stakeholders.
The APWU represents more than 200,000 active and retired employees of the U.S. Postal Service. APWU members are office-supply customers and would be affected by the proposed merger.
The full report can be found at: http://www.apwu.org/bad-business
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Read more: http://www.sun-sentinel.com/business/fl-staples-office-depot-postal-union-new-report-20151105-story.html
BlueJazz
(25,348 posts)ErikJ
(6,335 posts)This will be a true monopoly if Staples buys OD. Must be stopped. Illegal.
paul ofnoclique
(81 posts)Cancerous Capitalism scores again!
mhatrw
(10,786 posts)Oh, invisible hand, can you save us from you?
avaistheone1
(14,626 posts)eppur_se_muova
(36,302 posts)To widen the market and to narrow the competition, is always the interest of the dealers
The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.
Adam, Smith, The Wealth Of Nations, Book I, Chapter XI, Conclusion of the Chapter, p.267, para. 10.
TexasBushwhacker
(20,221 posts)I think I'll have to check into independent office supply dealers.
Enthusiast
(50,983 posts)This sucks.