Collins formally ends Versamark ink supply agreement with Kodak

By David Ward, San Diego, Thursday 03 May 2012

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Seven months after their very public legal feud, Cincinnati-based Collins Ink this week formally ended their agreement to supply Versamark ink to Kodak--but couldn't resist a few parting shots.


In comments to PrintWeek, a Collins representative suggested Kodak may have been selling the Collins supplied ink under the Kodak brand at huge price markups internationally, noting, "Overseas customers were paying as much as 60% more for standard inks than customers in the United States. That became an embarrassment to Collins. Even if Kodak had not been heading towards bankruptcy, Collins had planned to exit the contract."

The lingering bitterness between the two companies is not surprising given the battle they engaged in last October, when Collins tried to abruptly end its supply deal early claiming, among other things, concerns over Kodak's financial viability.

Kodak quickly obtained an injunction in US District Court in Western New York by arguing that the contract between the two companies required 180-day notice before one side or the other could terminate the deal without cause.

Eventually the two sides worked out a truce that had Collins fulfilling its ink supply contract for six additional months, which ended a few days ago.

In a press release announcing the formal termination of the agreement, Collins noted it has been making ink for the Versamark line for 20 years and that the Kodak agreement had been in place for a decade. The company added, "Effective immediately, customers with high-speed Kodak Versamark printers can purchase their fluids directly from Collins Ink at recently announced prices."

Collins added it has produced between 3,000 and 4,000 distinct formulations that have been used in Kodak Versamark printers. "Collins Ink is known for its commitment to quality and customer service, and for having inks that are in most cases superior to similar Kodak branded inks. Customers should experience no warranty related issues using Collins branded inks," the company added.

The Collins representative later told PrintWeek the company already has the sales and support infrastructure to be a direct supplier to Versamark customers.

"Throughout its contract with Kodak, Collins Ink sold to and supported customers in the field. Customers were able to place orders directly with Collins and work with Collins to develop specialized and custom inks when necessary," the representative added. "That will not change. In certain regions, Collins may work with a very limited number of distributors, but only if Collins is assured that the level of service and support customers receive is up to the standard that Collins sets for all the fluids it supplies. Collins has opened a German division that will begin to produce inks for the European market most likely in early 2013."

Kodak Digital Imaging Systems did issue its own press release as well, noting, "Collins Ink is no longer an approved supplier of inks and fluids for Kodak Versamark printing systems. Current customers of Kodak Versamark Digital Printing Systems may continue to order Kodak Inks directly from Kodak with no change or disruption in service.

In earlier comments, Kodak officials there had suggested the division was in the process of boosting Versamark ink production at its Dayton, OH-facility to make up for the expected loss of the Collins supply.

One major question from Versamark customers is whether Collins moving from Kodak ink supplier to Kodak ink competitor will create competition in the space that could lead to lower prices.

The Collins representative did not have a direct answer to that, but did note, "The original deal with Kodak was set up so that the customers would not be hurt by the partnership of the two companies. When the deal was made, Collins Ink had captured 50 percent of Kodak's ink market outside of Japan. The way the partnership worked, Collins produced about 90 percent of the ink produced by both Collins and Kodak but sold the inks to Kodak at half of its traditional margin. Kodak sold approximately twice as much ink also at about half the margin. In that way, customers' prices didn't change."

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