By: Jim Rosenberg Abitibi-Consolidated Inc., North America's largest newsprint maker, told customers Wednesday that it is reducing its latest price increase of $50 per metric ton to $35, retroactive to August. "I would expect others to fall in line," a newspaper company executive said of other suppliers.
Not merely an acknowledgement of lower negotiated pricing, the reduction represents "money to be returned to customers," said one newspaper group's buyer, who insisted on anonymity. This retroactive reduction is expected to take the form of credit toward October purchases.
The Montreal-based giant's last two $50 increases failed to take full effect at the outset. The full $50 across-the-board August price rise saw some customers paying the increase while others went elsewhere -- typically to smaller suppliers whose newsprint prices rose less than $50. "Abitibi and [No. 2 supplier] Bowater need to strike some sort of deal to get that business back," said the same executive.
The buyer said crediting part of the increase to customers is one way to do that. "In some ways," the executive continued, "this may be viewed as a more customer-friendly move."
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