Avery to Be Part of Probe on Industry

Avery Dennison Corp. said late Monday that it probably would receive a subpoena in connection with a criminal investigation into “competitive practices in the label stock industry.”

The Pasadena-based manufacturer of self-adhesive labels and office products said it “expects to” cooperate fully with the inquiry by the Justice Department. The company didn’t elaborate on the nature of the criminal probe.

Avery Dennison said it also had been advised that federal officials oppose a proposed merger between two other labeling companies -- UPM-Kymmene and Bemis Co.’s Mactac division -- because investigators believe that some “competitors have sought to coordinate rather than compete.”

Company executives said Justice Department officials had not made any “specific allegations” against Avery Dennison, an industry giant that generated more than $4 billion in sales last year.

Avery Dennison said it was committed to meeting consumer demands “on the basis of quality, performance and price” and that it considered the label industry “to be highly competitive.”

Indeed, even now the giant is jockeying to be the first to develop a radio-frequency identification tag and has hired scientists from around the globe in a race against its rival, 3M Co.

Avery Dennison has disclosed the hardball nature of the business before: An alliance with Taiwanese rival Four Pillars Enterprise Co. turned sour in the late 1990s when Avery Dennison accused the company of stealing trade secrets. (Two executives at Four Pillars were convicted of espionage in 1999.)

Since then, Avery Dennison has been on an acquisition spree, buying a maker of reflective highway safety products and a CD- and DVD-labeling operation. Such purchases helped bolster revenue by 11% last year.

Avery Dennison said recently that it planned to focus on existing businesses, such as retail labels and reflective products.

But the company has set ambitious goals for growth. It forecast its first-quarter earnings would rise sharply on sales that it projects could jump by as much as 26%.

Robert G. van Schoonenberg, the firm’s executive vice president, said in the statement that the company “takes its legal and ethical obligations very seriously and attempts at all times to act in accordance with both.”

Avery Dennison shares rose $1.32 to $60.13 on the New York Stock Exchange.