As I have told a few merchants, this is a very, very bad time for any manufacturer to be raising prices. The assumption that the industry can merely “pass it on ” is very naïve. In this market and given our products, when I see any cwt price rising 10-15%, I cringe. Why? Because above our current prices either:
a. I am eating some/all increases in paper cost or
b. We do not get the work without discounting labor.

The last thing I want to do is discount labor right now. So, if our price is high, we have to run roll stocks at lower prices. That is simply reality for us to increase market share, add incremental volume.

This new economy in a nutshell for printers:

“The market dictates prices, regardless of what an estimate or supplier cost may say / be. The key to success is figuring out how to produce the product for a profit, at an acceptable market price. The ONLY logical and sane way to do that is lower your material costs. An endless discounting of labor is why the sheriff has visited the doors of so many printers… “

What the mills do not want to acknowledge is the economic state of the industry. These kinds of actions simply cause me to look elsewhere for supply lines. I’ll run like hell into the arms of a foreign company if I am stabbed in the back by my “domestic partners”. When it comes down to “survival”, which is where the industry is, NVO and all others will look to foreign sheets now more than ever. I cannot raise prices, nor pass on these types of increases. I have contracts that are locked in. These prices increases will simplyhave the reverse effect they think they will have. Business is down, so I raise my prices? Huh ? Anyone ever hear of the elasticity of supply, price and demand? You CANNOT “price increase your way into Revenue growth”,  when demand is down. People use alternatives, and in our case foreign sheets, or EVEN WORSE they drop print and use NEW MEDIA, because print is rising in cost in a down economy. This is just a plain stupid strategy, from a marketing and financial viewpoint. It’s also ironic, given all the emphasis on “green printing”, “the power of print”, etc…and then create a strategy that cause people to run away from your products. Not very bright. It is insane to raise prices to try and cover Revenue losses because the industry is down 20-30%. They need to lower their costs of production, like everyone else. Renegotiate union agreements.  Downsize. Do more with less. That is what every other industry has to do…
Chile is very transparent excuse, as are a myriad of other excuses to raise prices. This is a HUGE disservice to the industry. And I think, damaging to mills in the long run. The world has changed in the last 18 months. The industry has changed. But it’s the “same olde game” with paper manufacturers. In the meantime – clients are cutting print budgets left and right, reallocating resources to New Media. And the paper industry is putting another nail in their own coffin by raising prices,  MAKING and daring customers to leave them. Arrogance is also not a wise strategy. I am all for supporting domestic firms, and always do whenever possible. BUT when they fail to recognize the damage they incur to their “Business partners”, I have no hesitation in making any foreign firm wealthy, since the domestic firm could care less about the domestic  industry they allegedly serve. Sure makes me look at foreign sheets, regardless of what tariffs may be in place. And, regardless of body, gloss, or runnability – CLIENTS WANT LOWER PRICES… ALL ELSE IS SECONDARY IN THIS NEW AND LASTING ECONOMIC MODEL. This is not a “blip on the screen”. The industry and the economy have changed forever. It’s time the paper industry changed their pricing and expense perspective, before they turn themselves and the industry into buggywhips.