Assessing the Consequences for Competition
Chapter 5: Structure and Competitive Process in Paper and Board Markets
5.0 INTRODUCTION This chapter provides the background setting for detailed analysis of speciﬁc individual merger cases and remedies in what follows. There are seven sections. The ﬁrst three set the scene: Section 5.1 deﬁnes the appropriate NACE broad industry/sector (21), and identiﬁes all merger interventions by the EC over this period; Section 5.2 provides some brief information on broad aggregates and trends, and an assessment of the standing of the European industry in the world as a whole; and Section 5.3 identiﬁes the leading ﬁrms. The following four sections turn more speciﬁcally to those features of market structure and the competitive process that are likely to inﬂuence our choice of oligopoly models. Section 5.4 establishes market deﬁnition. Section 5.5 discusses the key features of the product: on the demand side, the nature of the product and product diﬀerentiation; on the supply side, costs and technology. Section 5.6 surveys available data on industry structure, notably, leading market shares and concentration. Section 5.7 concludes with a preliminary assessment of the implications for the nature of the oligopoly game and the competitive process.1 5.1 DEFINING THE SECTOR It was agreed with the Commission that this case study sector should be deﬁned as pulp, paper and paper products (NACE 21). Table 5.1 shows the NACE deﬁnitions at the 2, 3 and 4-digit levels. There is a clear vertical sequence, running from pulp (21.11), the main input into paper, through paper and board (21.12), to...
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