Many of the UK’s predominately pro-leave newspaper publishers were quick to pour scorn on “experts” and politicians who suggested that a vote for Brexit could increase prices for British consumers.
But in a cruel twist of irony, according to the Financial Times, Brexit is already impacting on the British newspaper industry with the falling pound forcing the cost of newsprint (which is largely imported) up by an additional 8 percent from £330 to £360 per tonne. Meanwhile, newsprint costs for publishers across the Eurozone have remained stable at €440 per tonne.
Adding more woes to an increasingly financially stretched industry with falling advertising revenues and circulations, analysts suggest newsprint costs will continue to rise in 2017. According to the print industry research firm EMGE, newsprint cost are set to rise above £400 per tonne.
Anu Ahola, a senior vice-president at UPM (Europe’s largest newsprint supplier) said: “Over half of newsprint paper consumed in the UK is imported, and after the devaluation of the pound, the market has naturally been less attractive to the importers.”
UK publishers are continuing to look for new ways to save money, cutting editorial jobs and reducing pagination of titles. Some, including DMGT, are taking more drastic actions and looking into the future of printing operations in the hope of finding multi-million pound savings through consolidation.
Thomas Caldecott, an analyst at the subscription research company Enders, said: “For the past 10 years, newspapers have been able to maintain profitability by cutting variable costs. But they have cut all those variable costs and now they are getting to the stage where they are going to have make some very difficult choices.”
How long it will be before more publishers follow The Independent’s lead and come to the conclusion that newsprint is just too expensive is anyone’s guess, but undoubtedly many newspaper purists will rue the day they chose to ignore the “expert advice” that foretold of the price rises that may ultimately close many of their businesses.