News publishers are under pressure due to ongoing strike action at one of two major suppliers of newspaper stock to UK publishers, according to experts.
Workers at UPM’s pulp and paper plants in Finland downed tools on 1 January.
This was due to end on 22 January, but, last week, the union extended the strike until 5 February. UPM described the strike as “exceptional” as “tasks critical to society have not been excluded” from it.
A senior UK newspaper industry source expressed concerns that the paper crisis could impact allocations and availability in stores towards the beginning of February, with newsprinter paper stocks described as “very low”.
Due to UPM’s decision to sell off its only UK newsprint mill last year, the UK has only one newsprint mill – Palm Paper in King’s Lynn. While one expert said UPM was likely to “prioritise” newsprint with any remaining capacity not affected by the strike, the extent to which this and Palm can cover the needs of the UK’s news publishers was described as “unknown”.
The shortages compound already high prices on newsprint.
Enders Analysis claimed newsprint inflation hit 50% in the final months of 2021 and, before the strike, predicted further rises in early 2021.
In its financial results also filed last November, the Daily Mail described the increases as the most severe of the past 25 years.
One global paper industry analyst told betterRetailing: “The strike has massive consequences for paper demand and prices. Rather than the usual six-month agreements between mills and printers, we’re seeing a lot more short-term agreements as newsprinters do everything they can to secure stock.”
They predicted publishers would look to cut pagination in an attempt to maintain supply levels and reduce the impact of rising paper prices.
The analyst said: “We’ve all seen the new-year price rises at national publishers, but there’s only so much that can offset the inflationary pressures they are seeing, especially in newsprint.
“They will have to look to further means of controlling cost.”
In a sign of the impact on publishers, North Kent free newspaper The Downs Mail said its current business model was unviable due to the pandemic and print prices.
An appeal from the title to readers stated: “The cost of the paper we are printed on has risen sharply with two price rises this year, with another steep increase due in January, estimated to be around 30%.”
A statement by UPM said it would “service its customers from its mills outside of Finland to the extent possible”.
“At this point, UPM does not disclose estimates of the economic impacts of the strikes,” it added.
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