Inflation conflation

Friday, October 22, 2021

Jo Francis ponders print's inflationary issues.

“It’s worse than the 1990s”. That was the verdict of one long-standing paper industry pro this week. 

One might reasonably imagine that print and paper prices are a topic for discussion in a fair few boardrooms right now. 

Of course, the daily headlines in the national news about inflationary pressures on the price of pretty much everything means those C-suite execs will be pondering rising input costs across all sorts of areas, from energy to people. 

In a way, that could be helpful for print bosses as they explain why these increases have to be passed on. 

My paper chum said he’d never seen anything like it in terms of the rate of the price increases, and the extent of the shortages in supply, and said that some mills had put prices up by 25% in the space of eight weeks.

Earlier this week Weedon Group boss John Weedon spoke on BBC Radio 5Live’s Wake up to Money show and said the firm spent £6m on paper last year, and it would be £12m this year.

Since the pandemic-induced e-commerce boom of last year demand has exceeded supply for the paper-based products he needs, such as containerboard and kraft paper. 

Weedon told me: “I’m running out of adjectives, we need a new lexicon for this situation.”

As always, the outcome of all this will depend upon who you are, what you print, and who your clients are. 

In publishing, there’s little doubt that some titles will become uneconomical as a result of all of this, and it will speed the switch to digital editions. And no doubt big publishers of newsstand titles will be taking a long hard look at the number of overs they’re producing and cut those right back. 

What will cataloguers do? They know the flick-to-click catalogue promo is an effective sales tool, but what they don’t necessarily know is how much the next print run will cost them. Tricky times. 

Irony of ironies amid so much talk of sustainability at the moment, the price and availability of paper-based materials could push some end users back into using plastics.

I also imagine that those printers and print management companies that have multi-year contracts with, for example, big retailers and brand owners, will be poring over the small print right now. 

Even if there’s a clause in there about being able to pass on this magnitude of raw material price increase, it’s “bloody difficult”, in the words of one print boss, to actually push it through.

In light of all this, it was good to read that marketing budgets had been revised upwards in the latest IPA report – they’re going to need it. 

Perhaps we should take inspiration from that famous Stella Artois advertising campaign: “Print: reassuringly expensive”.

 

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