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Justice Department probes packaging firms over box prices
3 major cardboard producers disclosed grand jury subpoenas in regulatory filings
The Department of Justice building in Washington. (Al Drago/Bloomberg)
Key Takeaways:
- Three major U.S. cardboard producers received grand jury subpoenas in a Chicago federal investigation into potential price-fixing involving containerboard and related products.
- The probe follows a class-action lawsuit alleging collusion since 2020 as industry consolidation and repeated price increases draw scrutiny.
- The companies said they are cooperating fully, while the Justice Department has not accused them or their employees of crimes.
Three of the largest U.S. makers of cardboard products said they received grand jury subpoenas from the Justice Department as part of a potential criminal price-fixing investigation.
Smurfit Westrock, International Paper Co. and Packaging Corporation of America disclosed the subpoenas — part of a grand jury investigation in Chicago federal court — in separate regulatory filings this week. In its filing, Smurfit Westrock said the probe was focused on the pricing and sale of containerboard and related products.
The companies said in their filings that they are cooperating fully with the investigation. They didn’t immediately respond to requests for comment.
A class-action lawsuit last year accused containerboard makers of conspiring to fix prices on products starting in 2020. The defendants in the case included Smurfit Westrock, International Paper, PCA, Koch Industries’ Georgia-Pacific, Greif Inc., Pratt Industries and Canada’s Cascades Inc.
Georgia-Pacific, Pratt, Greif and Cascades didn’t immediately respond to requests for comment about whether they have also been contacted by prosecutors.
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Smurfit Westrock, International Paper and Pratt rank Nos. 4, 6 and 9, respectively, on the Transport Topics sector list of the top paper/office products carriers.
The Justice Department hasn’t formally accused any of the companies or their employees of a crime, and investigations don’t always lead to charges.
The litigation comes as the global containerboard industry has become more concentrated in recent decades. Smurfit Westrock is the result of a 2024 merger between Ireland-based Smurfit Kappa and Atlanta-based WestRock. PCA bought Greif’s containerboard business last year for $1.8 billion.
The box industry has been struggling as inflationary pressures and high freight costs weigh on demand for its products. Major producers have raised prices a number of times this year, hoping to offset the impact of lower volume. Fastmarkets RISI’s index for North American containerboard prices rose in September, reflecting those increases. That benchmark helps dictate pricing for some contracts.
The Independent Packaging Association, which represents companies that don’t own paper mills and instead buy the material for conversion into corrugated cardboard and boxes, said earlier this year that such “increases are reflective of a small group of producers having market dominance.”
