The Competition and Markets Authority has given the go ahead to the merger between News International’s newspaper printing interests and those of the Daily Mail Group.
This clears the way for an independent contract print business to be set up, centred on the Newsprinters operations, to produce the Daily Mail and Mail on Sunday in addition to the Times and Sun titles, Telegraphs and Financial Times that Newsprinters already produces under contract.
The decision means the end for flexo printing of newspapers in this country as the Mail’s Thurrock site was the last plant so equipped, it having closed Didcot some years ago.
The flexo process, while more than competitive with litho 30 years ago, is now more expensive. This means that the Thurrock site has only been able to win limited print contracts. Therefore the merger would have little impact on competition for newsprint capacity in the south.
In the north, the closure of the Newsprinters Knowsley site which was mooted before the merger was announced, would have meant more of a loss of competition than with the merger, even though the Mail site at Dinnington near Sheffield will now close.
The deal effectively means that newspaper printing in the UK is in the hands of the new business, Reach (which prints the Mail, Star, Express and Guardian titles), and Newsquest’s diminishing number of sites.
In reaching its verdict, the CMA examined internal documents and took evidence from third parties.
In its statement, it says: “The bidding data indicates that they do not compete materially for third-party newspaper printing services. In the North of England, the parties have not bid for the same contract at any point over the past eight years. The JV creates more spare capacity in the north of England than in the counterfactual scenario where News UK’s Knowsley site would have closed.
“In the south of England, there will be less total capacity post merger but there will still be an excess of spare capacity. Having spare capacity means that, post merger, customers can have their printing needs met in both the north and the south of England.”
The CMA was asked to investigate the impact of the merger on the market when the deal was announced in October. Now it has been cleared, the JV is expected to takeover in June. Darren Barker, Newsprinters’ managing director will be its CEO while Julie Palmer-Poucher, currently group production director of DMG, becomes COO.
