PaintSquare.com
      | Connect Follow us on Twitter Like us on Facebook
About | Subscribe | Advertise
  

 

Download our free Bridge Coating Systems eResource Book

Paint and Coatings Industry News

Main News Page


Rival ‘Vigorously’ Pressing Graco Suit

Thursday, February 9, 2012

More items for Coating Application

Comment | More

While Graco Inc. prepares to parry federal antitrust action aimed at stopping its takeover of ITW Finishing, an industry competitor is “vigorously” pushing its own antitrust lawsuit against the nation’s largest spray equipment maker.

Polyurethane Machinery Corp. (PMC), based in Lakewood, NJ, has announced that “it continues vigorously to pursue its claims against Graco, Inc. for violation of federal antitrust laws.”

 technorati.com

 technorati.com

The Federal Trade Commission and a competitor are both accusing Graco of anticompetitive practices.

The manufacturer of urethane spray and pour equipment has been prosecuting antitrust claims against Graco since 2008 in U.S. District Court in New Jersey.

‘Retaliation’ Concerns

PMC alleges that after Graco acquired Gusmer Corp. and GlasCraft Inc., it “systematically raised the prices of spray foam equipment, while simultaneously attempting to inhibit PMC’s entry into the market by threatening distributors with retaliation if they choose to do business with PMC.”

Graco did not respond Thursday to a request for comment on the case or on PMC’s latest statements.

The claims are similar to those made in December by the Federal Trade Commission, which announced that it would attempt to block Graco’s $650 million proposed takeover of chief rival ITW Finishing LLC from Illinois Tool Works Inc.

The FTC said it had filed an administrative complaint and would follow with federal-court action to halt the deal.

‘A Bad Deal’

Richard Feinstein, director of the FTC's Bureau of Competition, called the Graco-ITW transaction “a bad deal for manufacturers and consumers [that] would leave them facing higher prices and reduced innovation.”

The acquisition would create a monopoly, squelch product innovation, discourage potential new entrants to the industry, and harm manufacturing nationwide, the FTC said.

ITW Finishing owns five of the industry’s oldest, best-known brands: Binks, DeVilbiss, Gema, Ransburg and BGK Finishing Systems.

Distributors: ‘The Sweet Spot’

PMC specifically notes FTC’s allegation that, if the Graco-ITW deal is completed, distributors would “fear retaliation from Graco if they carry other brands.” 

The FTC complaint says that distributors would have “no recourse” after the acquisition “to curb the loss of this competition.”

The complaint says:

“Graco’s president acknowledges that Graco already enjoys power over its distributors and industrial end users: ‘Number one is that you’ve got lots of end users out there. Oh, by the way, those end users like Graco. And oh, by the way, if they already have Graco and they know Graco, the switching costs are significant for them to switch away from Graco.

“’So . . . not only do you have thousands of end users, you have hundreds of distributors. And for a manufacturer, that’s a nice spot to be. . . . The ideal place to be, the sweet spot, for having the buyer power be low is to have lots of customers and lots of distributors.’”

‘Anticompetitive Consequences’

PMC says such “anticompetitive consequences” are “remarkably similar to those about which PMC has been complaining in the polyurethane spray foam equipment market.”

PMC says Graco has offered in the FTC case to notify distributors that they were free to carry competing brands and that Graco “would refrain from unusually large price increases for three years.”

In the spray foam equipment market, however, “Graco has offered its distributors no such peace of mind,” says PMC.

A hearing on the FTC’s administrative complaint has been set for May 15.

   

Tagged categories: Graco; ITW Industrial Finishing; Lawsuits; Polyurethane; Spray equipment; Spray polyurethane foam; Urethane

Comment Join the Conversation:

Sign in to our community to add your comments.

Armorthane
Polyurethane and Polyurea Sprayed-On Protection

Buy POLYURETHANE or POLYUREA coatings and spray equipment for years of proven chemical resistance, water- and weather-proofing, and structural improvements.


Advanced Recycling Systems
ADVANCED RECYCLING SYSTEMS (ARS)

Recycling Machines, Dust Collectors, Rapid Deployment units are time-tested and approved for the rugged industrial environment. Contact ARS today!
(330)536-8210


GMA Garnet USA
GMA Garnet™
Natural Abrasives

- Superior cleaning
  performance
- Even Profile
- Low Dust
- Cost-Effective
- Environmentally friendly
- Recyclable up to 5 times
Tel : +1 832 243 9300


Thermion Inc
Buy Back Program

We are offering $5,000
credit for your old Model
This drive system is
being discontinued by
the manufacturer.
More information at
thermioninc.com
877.884.3428


Hempel (USA) Inc.
HEMPEL PROTECTIVE COATINGS

Efficient systems and high quality products to reduce your maintenance costs. Visit Hempel Protective for more information.


HoldTight Solutions Inc.
NO FLASH RUST -
NO CONTAMINANTS

Our HoldTight®102 salt remover & flash rush inhibitor prevents flash rust by removing surface contaminants.
Contact us for your nearest distributor. (800) 319.8802 sales@holdtight.com


Minerals Research & Recovery

HIGH PERFORMANCE ABRASIVES


“Made in the USA!”

Why recycle waste from other countries? Go FASTER, CLEANER, at 1/3 THE COST with MR&R “All-American” Sharpshot®HP!!

WATCH THE VIDEO


Elcometer, Inc.
Elcometer 266
DC Holiday Detector

Easily Finds Pinholes, Flaws & Thin Spots; Safer, More Reliable Testing; Voltage-Adjustable Keypad; Dual-Safety Switch On Handle.


NLB Corporation
Water jet surface prep, high or low

See how quickly HydroPrep® tools do surface prep, with no containment needed. Choose automated Crawler for overhead, Vortex™ for floors, or handheld VertaJet™.

 
 
 
Technology Publishing

The Technology Publishing Network

The Journal of Protective Coatings & Linings (JPCL) PaintSquare
Durability + Design Paint BidTracker

 
EXPLORE:      JPCL   |   PaintSquare News   |   Interact   |   Buying Guides   |   Webinars   |   Resources   |   Classifieds
REGISTER AND SUBSCRIBE:      Free PaintSquare Registration   |   Subscribe to JPCL   |   Subscribe to PaintSquare News
MORE:      About PaintSquare.com   |   Privacy policy   |   Terms & conditions   |   Site Map   |   Search   |   Contact Us
 

© Copyright 2000-2015, Technology Publishing / PaintSquare, All rights reserved
2100 Wharton Street, Suite 310, Pittsburgh PA 15203-1951; Tel 1-412-431-8300; Fax 1-412-431-5428; E-mail webmaster@paintsquare.com