Avery Dennison Says It’s Part of European Probe

Avery Dennison Corp. confirmed Tuesday that European antitrust regulators had taken documents from its label stock facilities in the Netherlands and Germany as part of a broader antitrust probe of possible price fixing and manipulation of the European paper market.

The Pasadena-based company said it was cooperating with authorities.

Earlier Tuesday, the European offices of several leading forest-products companies were raided in connection with paper industry investigations on both sides of the Atlantic.

The U.S. Justice Department confirmed that it was investigating possible anti-competitive practices in the market for magazine paper. A department spokeswoman told Reuters that the probe covered the sale of magazine paper in the United States and elsewhere.

At least one other U.S. paper product maker also said it was part of the European probe. Packaging maker Bemis Co. of Minneapolis, one of Avery Dennison’s main rivals, said European investigators had visited its operations in Belgium.

Last summer, Avery Dennison and Bemis were both subpoenaed by the Justice Department in connection with an antitrust probe of the $5-billion market for so-called pressure-sensitive label stock used on a host of commercial and industrial packaged goods. Avery, with 2003 sales of about $4.8 billion, commands about half of the market.

The European raids were carried out by local or European Union antitrust authorities at Finland’s UPM-Kymmene, Stora Enso, Metsaliitto and M-real and Norway’s Norske Skog.

At least some of the raids were sparked by UPM-Kymmene, which alerted local authorities to alleged price fixing in the raw wood procurement market, the Finnish Competition Authority said in a statement.

UPM had approached antitrust authorities in Europe, Canada and the United States on Jan. 15 after an internal investigation.

The European Commission accused UPM earlier this month of being part of a plastic industrial sack cartel, a business it exited in 2000, and in the United States the company’s pressure-sensitive label stock business is being investigated.

Last year, the U.S. Justice Department sued to block the $420-million purchase of a Bemis unit by a UPM subsidiary. The government argued that the merger would hamper competition in the label-stock industry.

The lawsuit also made reference to an unnamed company that was a “leader producer” in the industry. Avery later confirmed it was the unidentified manufacturer. Avery also said then that it had a supplier-customer relationship with UPM. The Bemis-UPM deal was blocked in the U.S., and the companies eventually scuttled the transaction.

Still, the U.S. government remained concerned about the possible lack of competition in the industry and subsequently issued subpoenas.

On Tuesday, the European Commission told Bloomberg News it was coordinating its investigation with U.S. and Canadian authorities. Stora Enso said its North American unit had received a subpoena from U.S. regulators seeking documents.

Avery Dennison shares rose 71 cents to $60.74, and Bemis shares rose 46 cents to $27.19. Both trade on the New York Stock Exchange.