#LOCK & LOCK CONTAINERS USA PDF#
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Indeed, you state that 'relatively few' sales are made more than even 200 miles from a plant. While one may bid against another occasionally in special limited circumstances, you contend that the fact that all of the members' plants are more than 300 miles from the nearest member's plant precludes them from competing against one another in all but a few special cases. You contend that the five member steel drum manufacturers should not be viewed as significant rivals of one another. Members would not be required to purchase through Containers America, but might be asked to specify how much of a particular input they would buy at a particular price and to agree to use common specifications. It estimates that potential savings from the proposed joint purchasing could exceed ten percent of total costs. To overcome this cost disadvantage, Containers America proposes to purchase sufficient quantities of various steel and other inputs to qualify for quantity discounts. As a result, you claim that the larger manufacturers have a substantial cost advantage over single-plant manufacturers. You assert that large multi-plant manufacturers purchase the necessary material inputs at significantly lower prices than can be obtained by the proposed joint venture's individual members, and that such inputs make up more than fifty percent of the costs of steel drums. You indicate that the desire to use Containers America as a joint purchasing agent stems from the availability of quantity discounts on the steel and other products needed to manufacture steel drums. Russell Stanley accounts for ten to fifteen percent of such sales. Grief, the second largest manufacturer accounts for fifteen percent. In comparison, the largest steel drum manufacturer in the United States, Van Leer, accounts for about twenty percent of nationwide sales. The five members of Containers America together currently sell approximately five million of the thirty-five million steel drums sold in the United States, or approximately fourteen percent of the total.

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The members would be free to bid independently outside of the joint venture and would continue to act independently of each other in seeking business within their own regions. All price discussions among the members would be limited to information necessary to prepare national or multi-regional bids, and the members will not exchange any other non-public information. You assert that while Containers America's members 'are frequently the low bidders in their respective regions, none has ever won a national supply contract,' and that each of the members has lost, or is faced with the prospect of losing, customers to rival manufacturers that can offer a national contract. This competitive disadvantage threatens to become more significant for Containers America's members because of what you perceive to be an increasing trend on the part of national and multi-regional customers to sole-source their supplies. As a result, you contend that Containers America's five single-plant members are at a significant competitive disadvantage vis-a-vis their larger multi-plant rivals in selling to national and multi-regional customers who desire to acquire their steel drum requirements from a single supplier. You assert that because of the high cost of shipping steel drums, a manufacturer in most cases, can only efficiently compete for sales within a 100-200 mile radius of its plant. (1)Д®ach of the five members of Containers America manufactures steel drums at a single plant. You have requested a statement of the Department's current antitrust enforcement intention with respect to the proposed creation and operation of Containers America as a joint selling and purchasing vehicle for five regional manufacturers of steel drums. This letter responds to your request on behalf of Containers America LLC ('Containers America') for the issuance of a business review letter pursuant to the Department of Justice's business review procedure, 28 C.F.R. Main Justice Building Main Justice Building View the related business review request letter For an official signed copy, please contact the Antitrust Documents Group.

#LOCK & LOCK CONTAINERS USA PDF#

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