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Merchants get tough on phoenix firms

Paper merchants have hit back at allegations they are supplying pre-pack and phoenix companies.

Merchants including Robert Horne, Howard Smith and PaperCo have stressed it is their policy not to supply printers that go into administration only to re-emerge with the same directors under a different name.

David Allen, UK regional president for parent company Paperlinx, said phoenix companies can use their unfair advantage to lower market prices or take market share.

"We also regard bad debt as outstanding debt and wouldn't trade with people that don't pay what they owe," he said.
Sister companies Antalis and McNaughton also have a "strict policy regarding phoenix companies", and maintain that they do not knowingly trade with such businesses.

Tim Elliott, managing director of Elliot Baxter, said the issue is gathering momentum because people, including local printers, are rightly getting very frustrated.

"EBB is very strongly against supplying restart-up companies, and we will not go back in once a company has pre-packed or phoenixed," he said.

"The difficulty is that unless paper companies take a stance, it will continue."

Premier Paper Group managing director Graham Griffiths said his firm doesn't supply phoenix companies.

For more, see next week's PrintWeek.

Comments

The comments below do not necessarily reflect the views or opinions of printweek.com, Haymarket Media Group or its employees

Bin Crozier - 05 February 2010

very commendable! However i've worked at a restarted company that have been supplied by at least 3 of the above merchants.

Reg Little - 05 February 2010

I don't want to be childish but I think somebody's pants are on fire here. BAS turning into Guilder Graphics turning into Borcombe turning into CCR were supplied by above mention merchants. So am I right in think no merchant is going to supply Midas or Miday!!

Arthur Sternesky - 05 February 2010

Graham Griffiths I hope you recover from your recent bout of Amnesia. Premier not supply phoenix companies I nearly choked on my CoCo Pops when I read this

Bin Crozier - 05 February 2010

Do the merchants think we are idiots? All the above are hypocrites, they ALL do it. Lets see how many of them are dealing with Midas and Midway then we can expose the liars in our midst

Bin Crozier - 05 February 2010

Dave Allen is one of the best comedians we've ever had - but im thinking of the Irish, sadly deceased one!

Glen Perry - 05 February 2010

Apologies to those paper boys but you are talking tosh! If you really think that you are not supplying pheonix's do you want the evidence to prove that you are?

unhappy printer - 05 February 2010

To be fair Ebbs are very good with pre packs etc

Bin Crozier - 05 February 2010

I agree UP - Ebbs have a good policy

Reg Little - 05 February 2010

Ditto on the above pro Ebbs comments as for the rest BOO HISS

Edna Bag - 05 February 2010

Looks like they are feeling at risk of having their plums tweaked, perhaps they have taken the time to have a read through the rambings on here and seen the growing amount of printers who could remove merchants dealing with pre packs. This is a positive move if they do it rather than make the noises.

There is a case for merchant groups to be replaced by the supporting mills, the tonnages would then be captured regardless of printer.  

Moaner Lisa - 05 February 2010

Be interestin' to hear from NAPM on dis one hactuarly innit.

Bin Crozier - 05 February 2010

You are right Reg. When i was at the helm of Guilder, Borcombe i rolled southern paper several times, and they kept coming back for more of the same! And i gave it to them!

Burned Out - 05 February 2010

Absolutely Priceless Article - I nearly Pi$$ed my pants laughing at this one! Really cheered me up on a slow Friday. I agree that EBBs have a good policy but the rest of the merchants are such a joke its not funny anymore! Before the ink dried on the adminstrators cheque McNaughtons/Antalis were straight into MIDAS dropping off 25 pallets of paper.

Bin Crozier - you are the man, bend them over a ride them big boy!!!

Paul - 05 February 2010

What about the ink and plate suppliers. Lets get onto them as well. If we can stop pre pack/phoenix companies being supplied with either paper, plates or ink then job done.

Print Chimp - 05 February 2010

Pants on fire . . . . brilliant.

Probably cheaper to burn your pants, than paper . . . . unless of course, you're not paying for your paper . . . . EBBs keep it up . . rest of you can rot.

ian chaplin - 05 February 2010

Strange that the majority of paper Delivered to Midas this week came from Antalis/Robert Horne when askesd the end user ordered it.

Forget the paper merchants they wont help name and shame the clients.

As for Ebbs 100% behind these guys.

Tin Pot PR - 05 February 2010

Good on you Mr. Elliott; you'll continue to get my business.

Mr. Allen - before you pen your tripe, why not find out who's supplying the new Midas press? It ain't Southern, they got burned for £400k or so.

From the mouth of the hairy lipped horse, McNaughtons are in there prostituting themselves and screwing up the industry for the rest of us.

Bin - I have a horrible feeling that you're not joking. More fool them eh?

john coward - 05 February 2010

Midway creditors meeting Tuesday 16th February

in Reading.

How many merchants will attend to ask the questions?

Bin Crozier - 05 February 2010

during the long drawn out sad debacle that was the guilder / BAS / Borcombe/ then H&S affair, the merchies came back and back, they will never learn and they will keep losing money. McNaughtons used to be the most profitable merchant in the UK, they have been turned over everywhere in the south and south west, they should know better. They will be turned over again. Whoever is in charge of their credit control policy will soon be working at mcdonalds.

Reg Little - 05 February 2010

If they do get a job at McDonalds could someone let me know which branch. Then I could go in and order a super Mac plus one of those hot apple pie things and promise to pay later. A few months later I would say sorry I haven't got any money you will have to let me off the money As he is McNaughton trained he will say ok. I then will go in a few days later wearing a different hat and order the same again.

Edward Lear - 05 February 2010

we too will be supporting EBB and have recently

started trading with them with a view to increasing

our spend.

We are sick with some of the comedians in the paper trade. It's insulting some of the well worded comments that come out. In our experience Paperlinx have been the most heavily exposed suppliers in many of the the pre-packs with the debts being staggering and beyond what credit insurance would cover.

Arthur Sternesky - 05 February 2010

Reg-bit of a side issue I don't think McDonalds do those hot apple pies anymore. I could be wrong but I think the McFlurry replaced it, which in my opinion was a mistake.

Peter Hughes - 05 February 2010

All these paper merchants other than Ebbs employ morons in their credit control departments. I know of one printer who has gone bust twice already, now in his third reincarnation. The guy owns all the shares, but is no longer a director since he was declared bankrupt last year, still effectively in control and is still being supplied paper by at least one of these merchants. Also being assisted by finance companies who would rather try to get some money from him than remove the machinery and take a loss.

Companies like Midas and Midway should be allowed to die, there is absolutely no benefit in selling to management buyouts apart from saving a few jobs for a few months. If the team couldn't make it work before how the hell will they do it now.

I blame the accountants, administrators and liquidators all they are really interested in are their fees, extortionate at that, just like the greedy bankers and we let them get away with it.

Reg Little - 05 February 2010

Thanks Arthur for the feedback-Maybe it's not such a bad thing. I always burnt my mouth when I ate one. I knew I had to wait until it cooled down but I couldn't. My mum says I'm impetuous but to be honest I don't know what that word means

Phil Ludgate - 05 February 2010

Arthur, I think you'll find McDonalds does still do the hot apple pies...... great article and some great comments. I have already had a good week and this has just finished it off nicely.

Nothing to add other than to repeat a comment I made on previous blog. The paper merchants can all have these policies but unfortunately they all live in the here and now and are under pressure to sell and don't really care who to. On one hand I can understand it but on the other it pisses me off when I lose out on work because some prick can sell at 25-30% less than me when my margin is already cut to the bone.

Doesn't like Paperlinx - 05 February 2010

Sums it up really , my wife has just seen the picture of Dave Allen and her comment was ..."He looks smarmy, you wouldn't trust him would you?"

Tartan Ink - 05 February 2010

What about some of these mercants who seemingly clear their consiouses by selling to these so & so's via credit card. They just want to make a sell no matter what the history.

I'm fed up losing work on price - particulary when I know my price is fair and sensible and some joker down the road who has just dumped his debts can just ploughs in under. Maybe some customers should look at who they are dealing with.

I'm a KFC man myself.

Arthur Sternesky - 05 February 2010

Doesn't like Paperlink- please inform you wife she is a fine judge of character. Also Reg impetuous means you should get out a bit more and find some friends

Aunty Set Off - 05 February 2010

Who's writing all this?

I have a different opinion based on my knowledge and experience.

I buy paper from EBB and Premier as they are the two largest independents, and they both work hard to win my business and give a great service. My issues are not just with the merchants but with PRINTERS WHO CONTINUE TO QUOTE UNSUSTAINABLE PRICES! Should we really be looking to blame everyone else but ourselves for the state of our industry? How can you all afford so much time to spend on this website, is someone paying you to say nice things about them. All of us know someone who is doing unsustainable prices, so why not knock on their door instead of blaming the suppliers!

EBB's are whiter than white? Are they?

Get real people. I have a different opinion.

Bin Crozier - 05 February 2010

who we are aunty, are poeple who are fed up with competing with print companies, who so often are firms that have gone bust and start up again, who peddle these unsustainable prices to which you refer - funded by a new debt free business at the expense of creditors. They are the scourge of the industry. The merchants are the only ones who can stop it now they too supply inks plates & chemicals. They are the ones who get hurt most ironically - in the pocket. They need to do to start practising what they preach and not make hypocritally press releases like this!

Bin Crozier - 05 February 2010

some bad english there but you get the gist

jon riley - 05 February 2010

Cedar colour dumped 2 million of debt on portswood colour who went bust and all staff and machinery went up to Chandlersford with no dept !same directors !dept dumped and ebbs etc still trading with them ?more hypocrisy!

Tartan Ink - 05 February 2010

Okay this is all getting a bit negative. There are some good guys and we should champion them.

Premier have my vote, I know of 3 instances where they have refused to supply dodgy startups where the others have.

Another certain company mentioned earlier in this thread, in glowing terms, have supplied on a cash sale/cc basis.

By the way I am a printer . . . I know what dot gain is!

I wonder if some of the posters above do. ;o)

paper cut - 05 February 2010

The whole industry needs to get its house in order!Merchants and suppliers with their pre-pack & phoenix "policies" and printers quoting crazy prices to buy business in an attempt to keep presses turning over..The whiter than white paper merchant referred to earlier in this thread are as guilty as the next merchant when it comes to supplying phoenix/pre-packs..they are little less obvious,rely

paper cut - 05 February 2010

As i was saying..!They tend to rely on credit card payments and avoid dishing out the credit...

Officer Dibble - 05 February 2010

LOL!

ALL the merchants named above are guilty of trying to recoup their losses at so-called phoenix printers.Mr Allen is either a liar or an idiot if he expects any of us to believe the load of nonsense he spouts above.I'm aware of at least 3 printers within a 20 mile radius of where we're based that have started up again and are being supplied by one of his group.I suggest he gets off his high horse before we start to name and shame.

Lofty Lofthouse - 05 February 2010

...............haaaaaaaaaaahaaaaaaaaaaaaaa................hoooooooohooooooooo........oh THAT Dave Allen!! Sorry for a minute I thought I was reading some jokes from the real Dave Allen. Although I can't see his hands in the picture so not sure if he has all of his fingers. By the words above though he must have been on the sauce.

I have worked in this industry for 25 years and I have never read such a ridiculous load of tripe from what you would assume is a highly intelligent individual. It absolutely confirms to me that most merchants are arrogant beyond belief and really do think the market is full of idiots. The suppliers that are playing it fair get my support every time, but not this lot. Its a mess that can only be changed by action from the market. Make a stance and these guys will be so deep in the brown stuff that change will have to happen. Sounds like EBBS and Premier are making the right noises although they have to be certain they have a clean bill of health on the subject.

Shame about John Terry by the way, I thought he should stay as England Captain!!

Print Consultant - 06 February 2010

And so my prophecy looks like it breeds new life!

I have said before that the large paper suppliers will continue to supply previously failed companies as a means of keeping their sales figures up.

naming & shaming these companies\(and I include consumable suppliers in this) will simply not work & nor should it either.

If the exisiting printing companies that are busy posting healthy profits\(not many!) refuse to deal with these suppliers then the rest of you had best prepare yourselves for some aggressive increases from the smaller suppliers as they cash in on a smaller market. In these times of fiscal uncertainty obtaining the best price for your paper & ink supplies is of paramount importance, The smaller you make this market the less choice you will have.

With rumours of larger ink companies pulling out of the sheetfed market expect some increases in this sector.

Mr Positive - 07 February 2010

Print consultant you are correct if the view is based only on the needs of a single organisation but flawed if viewed industry wide.

It is similar to over capacity in that a single printer must invest in the most productive equipment and increase capacity by default, but the industry as a whole has over capacity and reduction of this is paramount.

The prepack debate cuts across this and is why many people so strongly.

I suppose it depends if you are consulting a print company or the industry generally.

Buddy 'ell - 07 February 2010

PC if Paperlinx and Antalis do adopt a policy of non supply to pre pack, this takes out two of the ''larger companies''.

The merchants may have noted the growing frustration of printers and want to cash in on the anti pre pack message to increase sales. Also the competitive nature always exists (as competitive as as paper can get) as printers could always switch merchants.

The merchants are also only to aware that price increase could turn off the end user and force them into online or DVD use more than they currently are. Aggressive increase would not necessarily mean more profit.

Technically the market is already small and prices are very similar, but not price fixed obviously because that wouldn't be legal. Also the merchants and for that matter.

 

  

'Not A Doctor' (NDCT) - 07 February 2010

[quote user="Print Consultant"]the large paper suppliers will continue to supply previously failed companies as a means of keeping their sales figures up[/quote]

May be.  But right now it's just that no-one is quite certain who is supplying the phoenixes and who isn't.  So the strongest (most credit-worthy) printers who might take some form of positive action don't, because the perception is that all the merchants are at it.

There is a fantastic marketing opportunity here for one or two honest paper merchants. A sort of 'daz whiteness' phoenix challenge: "prove that we're supplying a phoenix and we'll give you free paper for a year." 

Justa Print Buyer (C. Kent) - 08 February 2010

I'm seriously thinking of switching our paper supplies to EBB. Used to use them years ago in another life and always had good service.

Reg Little, I could go to McDonalds, order a Happy Meal or whatever is they're called, in the name of Justa and say I'll pay at the end of the month. Then go back at the end of the month as Clark Kent and buy another one! I can see how this pre-pack malarky can become a habit once you've done it once.

Lofty Lofthouse - 08 February 2010

NDCT I agree. What would be difficult though is that as all of these guys are linked by the NAPM and may possibly meet up from time to time "for a coffee and to discuss the market" \(nudge nudge wink wink!!). Not saying its a cartel \(heard this in the pub) but having some unofficial consistent market policy at the top end of these companies keeps the grass roots teams activities distanced and allows customer choice to continue. What I mean is that if one or two of the more respectable merchants did use this fantastic marketing opportunity then there may be side effects amongst their fellow merchants which questions the overall unity they currently demonstrate. While they all carry on regardless what choice does the market have?

Print Consultant is also partly correct except that we are talking about reducing the numbers of 5hit companies in the market and allowing the volume to find another home in the market thereby increaasing the business at another printer. Simple market forces working fairly.

deviated vocals - 08 February 2010

 

cant see wht the paper companys would what to supply the prepacks as a policy tho.

i think they add to the over capacity and thus lower pricing in the market, so we all then try even harder to pressure the paper merchants to lower prices.

so fewer companies could? mean higher margins for probably? similar tonnage for the merchants.

problem i,s this is usually a case by case decision so no real strategy is in place.

The Mighty Wind - 08 February 2010

 Just a thought but what policy is in place at printers when dealing with customers that have pre-packed...........do you refuse there business?, how far and deep do you investigate your customers history?

Reg Little - 08 February 2010

ref The Mighty Wind comments above- I go deep and all the way!

Bin Crozier - 09 February 2010

ive heard that about you reg

Darren Mitchell - 10 February 2010

This is all very interesting, but if we \(as an industry) were to be honest with ourselves, it is us that do not have the 8alls to ask for our services to be paid on point of order. For some reason we as an industry \(and we are by no means the only one) have simply accepted that 30 credit is great, 60 is good, even 90 we can live with and if it takes 120 days then at least we are getting our money!

If a company - whether it be an agency / PM / direct client - is ordering a printed product, they are doing so on the price that you have given them. Ergo, they know what costs are involved in their purchase and they know that they have to pay for it, as do their clients and their clients and so on. Why is it then that with this information all the links in the chain cannot pay when they order these goods?

99% of what you buy in your life is paid for at the time of purchase, if the industry was to adopt this type of regime \(even it was just for the paper that was ordered), then this would negate poor cash flow and minimise bad debts right down the line.

I realise that this may be a little naive, and to start this ball rolling would need a huge amount of education to clients and suppliers. But if the paper merchants started the ball rolling in insisting that their paper be aid upfront, printers would have no alternative than to pass this onto their clients. And if the client was able \(and they would not have a choice, as it would be the norm.) to find the money for the paper element of a job, then why not the whole amount, they have to \(or at least are meant to) pay for it in the end anyway! This would have a immediate effect on the whole industry, in that everyone involved would have very much less exposure.

So, if this ideology were to start from the very bottom of the supply chain \(say the mills), then every other link in the chain would have to follow suit. After all you don't stop buying your groceries just because you have to pay for them at time of purchase.

Just a thought, and I do know it is a little bit of a Utopian idea, but I throw it out there none the less.

Edna Bag - 10 February 2010

99% of what you buy in your life is paid for at the time of purchase

Darren this isn't the case, otherwise credit cards and bank loans would be out of business and we would be paid cash in hand.

I understand your point but there are problems with paying cash upfront on a working basis. If we all worked 30-45 days max the issues would be easier to deal with. But with some large companies using cashflow as an earning mechanism in its own right, they have in the past pushed the line as you say to 90 - 120 days. One of the print managers was asking for a 3% rebate for being good enough to pay on 120 days, ar5eholes.

I doesn't really make much odds if everyone agreed to the same terms, it would work, but some clients want the safety net of not paying until the work is delivered to date and of good quality, to some extent this can be understood.

I do agree that any business that is deemed to be high risk or bad payment should be penalised by either paying at least COD or by pre payment. The problem is the same at any level where the majority who pay on time or early are treated as a risk for the sake of a few. Companies have to take credit control seriously and state penalty for late payment by term. 

      

Darren Mitchell - 10 February 2010

Edna, I agree with all you say. But if - all the way through the supply chain - it was COD, then you could be paid cash in hand, and COD would mean that the customer has a chance to ensure the goods are correct at the time of delivery.

As for the credit card issue, they are in essence; cash just a plastic / electronic form. When you use them you are paying up front. When I say paying for supplies upfront in cash, credit cards is more than acceptable.

I still don't see the argument that 30-45 days credit is fine, why? The buyer knows the cost at time of purchase, they know they have to pay for it, why wait 30 days to do so? Even if it means they pay by credit card and get the 30 days from this. At least this way it negates the perpetual elongation of payment that gets longer from one supplier to the next, all the way to the end user.

The Mighty Wind - 10 February 2010

 Problem is in order to process your product there is a time delay, you give me the order and I have to make it before I get paid. Thus i have to buy the machine on COD, the Materials on COD, labour etc...........then when i deliver I get paid. So in order to start in business I need to shell out massive amounts of cash and then wait to get some back in before I can accept another job where I have to pay COD. The introduction of credit basically made industry workable..........whether payment terms have got out of hand is an issue some countries are exploring

Juicy Info - 10 February 2010

Well Dave Allen, you might as well have put a bullseye on your forhead for everyone to take shots at. Coming out and making a statement like that is just adding fuel to the fire. We all know you supply phoenix companies as just about everyone one of us could name a handful!!! So why come out and make a stupid statement like that. The usual Paperlinx bulls**t im afraid. Worrying times for Paperlinx if my sources are correct, selling off internal departments to then rent back hhhmmm someone needs some cash!!

Lofty Lofthouse - 10 February 2010

JI - Well put. Making this statement looks more like a middle finger up to the market as in "where else are you suckers gonna buy your paper \(and consumables now of course) from"

PPX have already removed an entire tier of management from one merchant and continue to merge most backroom functions across RHG, TPC and HSGP. Meanwhile the head honchos carry on ignoring the needs of the market which will be who saves them from sinking if they listened. I fear though that this group is on a very slippery slope and I for one would not want to be relying on them long term.

Chas Foulsham - 10 February 2010

Talking about meeting up "for a beer and a sandwich," \(nudge,nudge, wink, wink) who remembers "GALA" back in the early '90's. They were the Greater Association of Laminators and Varnishers?

They sorted out the crooks!

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