Press

PRESS RELEASE 27 OCTOBER 2009
BSRLA calls on label material suppliers to put their house in order before increasing prices

The British Short Run Labelling Association today called upon the industry's major material suppliers to address structural problems in the industry before resorting to price rises that would further punish the industry. With an average of 35% increases in material costs in the past 18 months that significantly exceed inflation, oil price and currency influences, the BSRLA believes that further further rises are unjustifiable at this time.

Communicating the views of its members, consisting of MDs and owner managers of many of the UK's labelling companies, the association Administrator said "Whilst the BSRLA accepts that some increases have been necessary in the past 2 years, the material suppliers, dominated by 2 global firms are still seeking to leverage their position before addressing some significant issues that are only within their control to address."

He continued "Firstly there is the rise in pre-packs in the UK in recent times, which has cost material suppliers much in bad debt and yet they continue to supply phoenixed and established but financially weak labelling companies. Consequently suppliers pass on the resulting bad debt cost to the remaining firms that keep trading in difficult conditions, punishing those that seek to retain profits to improve their financial strength. We urge material suppliers not to offer credit to financially weak and 'new' labelling companies emerging from pre-packs, and supply these companies only on a proforma basis. This would improve material suppliers own profitability, support long standing and financially sound customers and assist in consolidation in the industry which is probably needed in the coming years. There is currently no benefit from trading with a strong balance sheet against a financially weak competitor when it comes to material prices - and that is just poor financial management on the behalf of much of the material supply chain who are out to secure volume at what would appear to our members to be any cost."

"To show their support for a stronger UK labelling sector as we crawl out of recession, we would urge suppliers to declare the % of bad debt in recent financial years to our members when looking at future prices. It is unacceptable that material suppliers believe that this issue is going unnoticed - its a hot topic amongst UK labelling companies and we want the suppliers to 'put their house in order' before coming asking for more price rises. Many suppliers are now starting to source material from smaller independent coaters overseas outside the usual supply chain in protest against this issue as they get good prices because there is no additional premium for covering bad debt. This is an issue that could be addressed easily and quickly with a sound credit control policy."

"Secondly, there is still a hive of inactivity in respect of processing industry waste streams, commonly stripping waste and huge volumes of siliconised glassine liner that is still being landfilled. Whilst there are some very limited routes for synthetic waste stream recycling that are still in their infancy, the BSRLA feels that with such a fragmented industry in the UK, suppliers need to introduce new waste collection and recycling schemes to tackle the huge amounts of waste the industry generates. Unlike conventional printing, labelling produces wastes that are not easily recyclable on a local basis, and again this is an issue that has seen very little demonstrable leadership from the major suppliers."

The BSRLA was formed in 2004 as an independent trade association for UK labelling companies. Membership is free to qualifying companies through its website www.bsrla.org.uk .

ENDS Inquiries to administrator@bsrla.org.uk The associations logo can be downloaded at http://www.bsrla.org.uk/images/logo.gif

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