Three reasons why your print prices will rise

2044192 — Fri, 08 Apr 2011 16:26:00 GMT

The birds are singing.
Daffodils and primroses are in flower.
It is beginning to be possible to have lunch outside.
The seasons are finally changing and spring is here.

But for print buyers there is another less welcome change.

Print prices are on the rise
Not all buyers have come across price rises yet, but over the next few months this will become a much more common topic of discussion. There are three reasons for rising prices:
-    Industry consolidation
-    A reduction in capacity
-    A change in printers’ mindsets

Industry consolidation
In the UK, the recent acquisition of the St Ives web division by Walstead is just the latest chapter in an increasing number of industry mergers and consolidations. These consolidations show a growing trend by printers to buy extra operations and run their business from more efficient factories with less presses. There can be little doubt that there will be some factory closures as a result of the St Ives acquisition. Acquisition and consolidation are leading to reduced capacity in the industry.

Reduced capacity
There has been a reduction in industry capacity as some very major print plants have ceased to trade recently. In Europe Schlott Group has fallen into administration and this has resulted in a major shortage of gravure capacity. I understand that one UK gravure buyer has had to pay a substantial increase in order to retain their print production schedule.

Other print plants are voluntarily choosing to reduce capacity and are shutting down machines.
One of the largest web printers in the UK is also turning away work as they do not have suitable capacity at present.

Suddenly, for some large jobs, capacity is more of an issue than price. And this means that printers are beginning to see the marketplace differently.

A change in printers’ mindsets
Some printers are now beginning to see that there are opportunities to stop the continual erosion of prices and reverse this trend. In the UK, one company is reportedly presenting the case for price increases to major clients. Another company is planning a price raising strategy. Some print companies are now beginning to turn away low margin accounts.

But printers haven’t managed successful price rises for years
Apart from passing on paper costs, the UK print industry has not been good at raising prices. However, a growing number of companies that I am talking to are creating active strategies to implement prices rises. It will only take one major player to successfully raise prices for the industry mindset to change. The combination of factors that are influencing the industry at present could create a turning point this time.

Print buyers should start planning for price rises
Firstly buyers need to think about allowing for price rises in their budgets. Then they should start talking to their businesses to understand what rising prices may mean for print requirements. Finally, buyers should consider having a back-up printer in place for their businesses. This is especially important if buyers have large jobs that may be affected by capacity cuts.

The start of spring traditionally represents the start of a positive change to the year. For print buyers, this year may be different.

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Three reasons why your print prices will rise