Staples and Office Depot, One Year Later: American Postal Workers Union Reaches Out To EU Allies as Companies Attempt to Save Stalled Effort to Create Office-Supply Monopoly02/04/2016 – Exactly one year after Staples and Office Depot announced a merger plan that would create a dominant office-supply store monopoly in the United States and other markets, the American Postal Workers Union said today that it is expanding its opposition to the plan to other nations.
The APWU is reaching out to overseas union allies and urging them to contact government officials in their countries, where regulators are now reviewing the merger. “We are working to protect consumers, businesses and other organization from higher prices and fewer choices,” said APWU President Mark Dimondstein.
The U.S. Federal Trade Commission and the Canadian Competition Bureau “made exactly the right call” in taking legal action to block the merger of Staples and Office Depot, Dimondstein said.
“It’s clear that when the two biggest companies in an industry combine, competition, innovation and consumer choice will decrease, and prices will increase,” he said. “That’s exactly what our anti-trust laws are designed to prevent.”
Nevertheless, Dimondstein noted, Staples and Office Depot are determined to fight the regulatory authorities in court. “It’s a desperate attempt to save a deeply flawed merger plan,” he said. “But these are big companies with deep pockets. If they are going to continue to push their unlawful plan, our members will not stand idly by.”
APWU leaders have been in contact with labor union allies in the European Union, urging them to oppose the Staples/Office Depot merger. “This is a global industry, and it’s a global fight,” Dimondstein said. “We’ve researched the negative impact of this flawed merger. We’ve shared our concerns with the Federal Trade Commission and we’re prepared to reach across borders to make sure regulators in other nations understand what’s at stake.”
Staples and Office Depot announced a merger plan on Feb. 4, 2015. APWU announced its opposition the same day. The APWU released “No Sale,” a report on how the merger would affect consumers in May 2015 and “Bad for Business,” a report on the harm to business-to-business transactions in October 2015. Both reports are available at www.apwu.org.
For any company to improve quality and lower prices, it must be in strong financial health. Not sure why anyone thinks that two deteriorating companies is better than one stable entity. Furthermore, office supplies companies have no durable competitive advantage and thus no pricing power. The APWU’s analysis is deeply flawed and its’ efforts should be focussed on restoring the USPS’s own financial health (losses upwards of $7 billion per year) and service quality (borderline average). The cost of office supplies is immaterial to any large organization and has nothing to do with the postal service’s ongoing massive annual losses (wages, benefits, inefficiencies, negative secular trends, and cap on stamp prices). Ironically, obstructing this merger will lead to sustained higher prices and lower quality for office supplies. Even all competitors agree that this merger is good for the country and for consumers- a rarity in a competitive world. If competitors are not afraid, then why is the APWU’s so concerned?