Cartels, conspiracies and crying foul

Every time newsprint prices hit their cyclical peak, newspaper publishers cry foul. Time and again, accusations of price-fixing and anti-competitive behaviour have been made against the newsprint supply industry.

This past crunch has been no exception. In the US and Europe complaints have led to inquiries by the relevant authorities - the Department of Justice (DoJ) in Washington and the European Commission in Brussels.

Last spring EU officials, helped by the Office of Fair Trading, raided 40 newsprint companies in the UK and on the Continent, taking away files and diaries to find out if suppliers have colluded in pushing up prices and controlling stocks. In the autumn the DoJ confirmed it was investigating the US supply industry to see whether there was any collusion over price.

The results are not yet known in either case, but most industry observers expect the inquiries to yield little in the way of levies or fines. Indeed, when market conditions improve and prices drop again, publishers will doubtless stop complaining and push for long-term contracts at low prices. Not that newsprint suppliers will necessarily play ball this time around. They feel newspaper publishers are guilty of similarly "anti-competitive" behaviour: ganging up on suppliers at times of excess capacity, holding out for deals that nearly drive the industry to the wall.

MH