IVE Group has fired the opening salvo in what could be a catalogue war by swiping from rival IPMG the multi-million-dollar contract to print Coles Supermarkets’ monthly catalogue.
The surprise move was revealed in a brief statement to the ASX on Thursday:
IVE secures new business in catalogue printing services.
IVE Group Limited advises that Coles Supermarkets Australia has awarded its catalogue printing services contract to Franklin Web (an IVE business) effective 1 July 2017.
IVE and Coles will now work co-operatively to develop a legally binding agreement and jointly undertake transition planning. It is intended that a binding agreement will be executed by February 2017.
The agreement comes just weeks after IVE completed a $116 million takeover of Franklin Web and AIW – a move seen as a counter to the market dominance of rival PMP, which is still awaiting regulatory approval of its planned takeover of IPMG.
The ACCC has expressed concern that the merger may substantially lessen competition in the supply of heatset web offset printing,
If the PMP/IPMG deal gets the green light, the sector would consolidate to two major players dominating over 90% of the catalogue market.
Coles’ glossy catalogue, which is distributed free-of-charge in supermarkets around the country, currently has a reported print run of 1.5 million a month. The latest data (August 2016) from researcher emma estimates the Coles catalogue has a total monthly readership of 3.9 million.