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Australian packaging group Orora's (ASX: ORA) response to unauthorised site visits from the French Competition Authority (Autorité de la Concurrence) has failed to fully allay investor concerns with its share price up only marginally after a significant 9 per cent drop on Friday.
This morning the group confirmed the watchdog visited the head office of its Saverglass subsidiary at Feuquières on 27 and 28 March, as part of a sweep of a "number of companies" following complaints from the French beverage industry over price increases prior to Orora's €1.29 billion ($2.16 billion) acquisition of the company.
Orora claims only a "small number" of complainants are customers of Saverglass, representing "minor trading relationships".
"It is understood a number of other participants in the sector were subject to on-site visits of a similar nature," the company said in a statement to the ASX, reiterating its commitment to cooperation with the regulator.
"The Saverglass leadership team is confident appropriate business practices have been followed, operating independently from other glass packaging manufacturers. Orora, and Saverglass, uphold strong standards of integrity at all times, with integrity being one of the company’s core values as well as having a strong commitment to competition law compliance.
"It is understood that investigations of this nature typically require years to progress."
Orora also emphasises that customary contractual terms were agreed at the time of Orora’s acquisition of Saverglass in 2023, including warranty and indemnity insurance.
"It is currently understood that the investigation relates to a period prior to Orora’s ownership of Saverglass," the company said.
"This period was marked by major events including the Covid pandemic and the start of the war in Ukraine in February 2022, which led to input costs for glass container production including energy, key raw materials and gas increasing significantly, as well as increased freight costs in an environment of very high inflation across Europe."
The probe is specifically targeting companies involved in the manufacture and marketing of glass packaging in France.
"Following press reports, the Investigation Services of the Autorité de la concurrence confirm an unannounced inspection, after authorisation from a liberty and custody judge, at the premises of companies suspected of having implemented anticompetitive practices in the sector for the manufacture and marketing of glass packaging," the authority stated in an announcement.
"Such an inspection does not prejudge the guilt of the companies concerned by the alleged practices, which can only be established following an investigation on the merits."
At the time of publication ORA shares were up 4.44 per cent today, but are still down on levels prior to Friday's announcement.
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