The fate of Australia’s regional publishers could be in the hands of one of the world’s biggest suppliers of paper after it announced plans to increase its costs by more than 30 per cent.
Norwegian-owned paper company Norske Skog has informed some of Australia’s newspaper publishers and print suppliers that it will increase its rates by between 30 per cent and 40 per cent due to rising electricity prices and high costs of freight shipping that have created supply problems.
One of Australia’s key paper manufacturers, Norske Skog, wants to substantially increase its costs.Credit:Louie Douvis
Industry sources who spoke anonymously because the discussions are confidential said Norske Skog had also told smaller publishers it would place limits on how much paper News Corporation could use. News Corp is the biggest newspaper publisher in the country and owns titles including The Australian, The Daily Telegraph and The Herald Sun. News Corp declined to comment.
Norske Skog is one of the key providers of paper to the local publishing industry. It runs a mill in Tasmania and until recently ran a New Zealand Mill, which were both providing paper to local outlets. The Tasmanian Mill - known as Boyer - now sells paper to publications in New Zealand and Australia.
There is another local mill called Opal, which is not owned by Norse Skog, but it does not specialise in newspapers or magazines, and the cost of buying paper from international mills is exorbitant because of current shipping rates.
Publishing sources have said an increase in costs of 30 per cent to 40 per cent may force them to hike cover prices for their newspapers and also lift advertising rates. It could also affect the frequency of printing and the number of pages appearing in metropolitan or regional newspaper editions.
If a solution with Norske Skog is not reached, the local publishing industry faces the risk of more newspaper and magazine closures. News Corp Australia last year axed hundreds of jobs and stopped the print editions of more than 100 suburban and regional mastheads. Meanwhile, Australian Community Media, which owns more than 100 newspapers including The Newcastle Herald and The Canberra Times, temporarily stopped print publication of non-daily newspapers during the coronavirus pandemic. Several long-standing independent newspapers were also forced to close during the pandemic.
Are Media, publisher of Australian Women’s Weekly and Woman’s Day, axed hundreds of roles last year and closed a range of titles (some have since returned to print under new ownership).
“If the price increases between 30 per cent to 40 per cent are correct, it is staggering that any organisation would think it is appropriate to implement those increases when our industry has endured such difficult economic conditions,” ACM executive chairman Antony Catalano said.
Nine Entertainment Co sources, who spoke on the condition of anonymity, said the company was taking the matter seriously but did not believe the change would affect its commitment to printing newspapers in any way. Nine publishes The Sydney Morning Herald, The Age and The Australian Financial Review. But both Nine and News Corp sources have told this masthead they have concerns with the proposed price hike, which could be implemented within four weeks.
Norske Skog, which predominantly prints newspaper, catalogue paper and magazine paper, has made the decision to bump prices due to large increases in the cost of electricity in Europe and the cost of shipping, which has risen dramatically since COVID-19. Gas prices are emerging as a major factor impacting pricing of imported product into Australia and New Zealand.
But unlike Europe, the cost of electricity has not grown substantially in Australia and Norske Skog receives government subsidies to ship products from Tasmania to the mainland and into other markets. Norske Skog’s Boyer Mill, which produced Australia’s first newsprint in 1941, remains one of the state’s major employers and received JobKeeper funding last year. Norske Skog was approached for comment.
The last time there was a major paper shortage was during World War 2, when limits on newspaper and importation of newsprint were enforced under the National Security Act in 1939. The amount of paper allowed for production was reduced by 35 per cent and newsprint rationing came into effect in mid-1941. It was not relaxed until October 1943.
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