This morning (14 April) UPM announced that the propsals for the UPM Pulp, Specialty Papers, Raflatac and Biofuels businesses put forward by mediator Leo Suomaa had been rejected.

Jyrki Hollmén, VP for labour markets at UPM said: “We are deeply disappointed in the decision of the union and in the continuation of the strike that has already lasted 3.5 months. UPM has been negotiating with an earnest mind and made several compromises.

"We also accepted the conciliation proposals. Modernising the agreement stemming from 1940s would be important both for the employees and the company," Hollmén stated.

The strike began on 1 January and has now been extended for the seventh time, to 14 May.

Hollmén added: “It is very disappointing that after intensive negotiations, no business was able to reach a conclusion. Petri Vanhala, chairman of the Paperworkers’ Union, confirmed in the mediation of all businesses that each business can be agreed separately.

“The mediation found settlement proposals for four businesses that took the needs and wishes of both parties into account. We were confident that both parties undertook to accept these settlement proposals and industrial peace would resume. Now that the union has turned down the drafted proposals, our businesses will make a fresh start.”

The board of directors of Paperworkers’ Union Paperiliitto stated that it could not accept the settlement proposals because they only covered half of UPM’s paper union employees in Finland.

It said the decision to reject was unanimous, and said the exclusion of Communication Papers meant it had to turn down the four conciliation proposals. 

Chief shop stewards at the mills had sent an open letter to UPM executives yesterday.

“The chief shop stewards are outraged that the petition was not answered in any way. Had a solution been found to the dispute, no other conciliation proposals would have had to be rejected,” the union stated.

One printer described the latest turn of events as “truly awful… they seemed more confident last week of reaching an agreement.”

The strike is causing havoc with label material supply availability across Europe.

Posting on LinkedIn, label industry expert Will Parker said: “It is unbelievable that they should have come so close yet failed again due to stubborn short sightedness.

“The anger will be felt far into Finland and far beyond the 104 days we have currently suffered for this behaviour. The continued ignorance to all its customers, the factory closures, loss of earnings and employment coupled with the supply chain shortages and costs it is causing go unrecognised day after day.

“It is astounding to think we could very nearly reach six months of action before resolution.”

Lars Ole Nauta, CEO of Danish label printing business Optimum Group also commented, and said: “I am so so angry... that I am lost for words, how can we ever repair the relationship with UPM/Raflatac after this?”

A paper industry source on the supply side also told Printweek that there was now speculation that UPM could decide to take drastic action at the Communication Papers mills involved in the strike.

UPM’s loss-making Communication Papers wing has 13 mills, of which four are located in Finland and therefore currently out of action due to the strike.

The four Finnish mills, which have a combined production capacity of more than 2.3m tonnes per annum, are:

• UPM Kymi (705,000tpa WFC and WFU graphic papers including Finesse and Fine)
• UPM Rauma (665,000tpa LWC magazine papers)
• UPM Jämsänkoski (630,000tpa of graphic papers including uncoated magazine paper and specialty papers)
• UPM Kaukas (305,000tpa of LWC graphic papers including Ultra and Star)

In a statement, Petri Vanhala, chairman of the Paper Association, said “UPM pushed itself into the corner because of its drastic goals, and does not seem to be retreating, even though the strike has lasted 104 days, the results of the locations at the beginning of the year will be zero and customers will suffer from material shortages.”

“The Paper Association does not aim for better working conditions than the expired paper industry collective agreement, and the goal of wage increases is in line with the general line. Compared to other forest companies, UPM's reluctance to reach an agreement has resulted in the company's employees being subjected to a completely unreasonable principled chase by the employer,” he said.

Shares in €9.8bn (£8.16bn) turnover UPM fell by 3.2% to €30 on the news.

The union estimates the strike is costing the group some €20m per week. If correct that would amount to €300m since the start of the year.