Expert input on pulp and paper policy

In a comprehensive report to the DTI, Genesis presented an analysis of import parity pricing (IPP) in the pulp and paper industry, including its impact on the downstream industries that convert paper into paper products.

IPP is practiced when domestic producers set prices according to the landed import price, inclusive of tariffs, transport costs, handling fees, insurance and any other costs incurred over and above the international market price. The practice of IPP is usually only of concern where it is a possible expression of an abuse of market power or excessive pricing. If a domestic company enjoys a cost advantage in relation to the rest of the world, IPP prevents domestic consumers from reaping the benefits of any such advantage.

The report therefore specifically assessed whether IPP revealed an abuse of dominance and analysed the likely effects of IPP on the various upstream and downstream industries in the pulp and paper industry. It concluded by making certain recommendations as to whether the DTI needed to take action in any of the markets examined and, if so, what the most suitable policy actions would be. These recommendations were used to inform the DTI’s policy on IPP.