Reader reaction: Will capacity cuts and closures have an impact on prices?

We ask if the ongoing downsizing in the industry will allow printers to increase prices

Andy Brown, director, corporate affairs, BPIF
I know that some print buyers have become concerned with the supply side and feel there are some real issues. If buyers get nervous about their own price cut situation, there will come a time when the mention of a price rise will not be met with laughter. Those companies that survive will need to invest, and customers have an interest in aiding the survival of their suppliers, especially when there are fewer and fewer suppliers. The difficulty is making it happen in a price-driven market, especially when there are so many different sources and media in some sectors. That said, a reduction in capacity has to be helpful in the long term.

Neil Long, managing director, Longridge Print
I don’t think it will have an impact on prices; that doesn’t just happen overnight. However, it will have an impact on work that is available and what goes round. I think closures will mean there are more customers looking for other suppliers – provided the failed companies don’t just start up again immediately. Customers will seek out forward-looking companies and that can create a sense of loyalty between printer and client. But you can’t up your prices by 20% or people will go elsewhere. What it will improve is the ability to choose what work you take on, rather than what you have to take on.

Gary Lasham, managing director, DS Smith Multigraphics
No, because the amount of capacity that has actually gone out has been very limited. Yes, there have been some closures, but a lot of those have either been bought out of administration or the equipment has gone elsewhere. There have also been a lot of new machines going in, so despite there having been several high-profile closures this year, there’s been little overall capacity reduction and there are still companies continuing to put more capacity in, so overall capacity is very similar to what it was a year ago.

Philip Colchester, managing director, Colchester Print Group
Our labels operation, Norwich Labels, has found that there is less price pressure in this area of business. Why? The roll-fed self-adhesive labels market is much smaller than the general print market and having been involved with labels since 2000, we have seen an easing of price pressure during the past year. This is mainly because there are fewer suppliers with whom we compete. Obviously the general print market is much larger, but we expect the same dynamics to come into play, although it will inevitably take longer. The market will be ruled by its own forces and as capacity cuts and closures reduce the supply line this will manifest itself in improved returns.