Sharon Brettkelly
Auckland, May 30, 2022
When the Kawerau paper mill closed last year, it left newspaper publishers here without a local source of newsprint. And as ‘The Detail’ finds out, it is beginning to cause headaches.
Not so long ago, the delivery of newsprint was a sure thing for local newspaper publishers. Now they are facing a price shock that could send some of them to the wall – with free community papers likely to be the first to go.
“It got delivered to our door. It was as easy as it could be,” Aaron Buist, Chief Executive of Beacon Media Group in Whakatāne said.
Soaring costs worrying
All that changed when Norske Skog’s paper mill in Kawerau closed last year, and publishers had to go offshore – to Norske Skog’s Tasmania mill – for their paper. They got a real taste of the supply crisis that hit newspaper businesses around the world, sending costs soaring.
And things are about to get more complicated. Under the current arrangement, Norske Skog is responsible for deliveries to the printing plants. But from 1 July, the printers will have to pick up the paper themselves from the port.
“That will be my job. As a printer, I will be receiving the containers, getting them cleared off, getting them unloaded, getting them to put onto a truck and delivered to my site,” Mr Buist said.
He explained why the new arrangement means the price his company pays for newsprint could double in just 12 months and why free community papers are at the greatest risk.
“This is the real concern to me. You are now potentially depriving communities of what I think is a critical window of what is going on in their community,” Mr Buist said.
Covid-19 and shipping woes
Covid-19-related shipping woes are not entirely to blame. Mills were closing or converting before that, causing a global paper shortage. Instead of producing newsprint, mills are making packaging for the likes of Amazon, Buist said.
“We have had it pretty good for a very long time and now things are changing dramatically. Adding to the financial burden for publishers is the need to hold more paper on-site due to supply uncertainty. Now, I am typically holding between one and two months of stock and if I can, I will hold more. That is a lot of money tied up in stock sitting in our warehouses,” he said.
It also means that Beacon Media may have to turn away new business because it only has enough stock for existing customers.
Creating customer awareness
Mr Buist said that he is starting to prepare customers for the looming cost rises and one of its own mastheads could be affected.
The King Country News is a free weekly community paper delivered to 10,000 letter boxes around the area.
“We are not actively considering cutting back on printing and distribution, but it is something that we have to be mindful as prices start to bite,” he said.
Sharon Brettkelly is Co-host of ‘The Detail’ podcast of the Newsroom. The above article has been published under a Special Arrangement.
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