Label stock prices rise by up to 21%

Avery Dennison Roll Materials’ UK label stock prices have risen by 21% since January to help offset the weakness of the currency.

Erwin Zijlstra, Avery’s European corporate communication director, told Packaging News that with the price increases – 6% in January and 15% in March – the firm was now catching up on changes in the exchange rate.

Zijlstra said the pound-euro exchange rate “strongly affected UK results” because the majority of the material sold in the UK came from mainland Europe.

“The prices increases in 2009 following the two price increases in 2008 are all aimed at recovering losses due to the exchange rate,” he added.

UPM Raflatac has also implemented price increases in the UK in the past year, particularly due to the “marked increase in oil-related raw materials”. However, it has not confirmed the extent of the increases.

“The price increases have been driven by a severely weakened sterling combined with raw material cost inflation,” said Tapio Kolunsarka, UPM Raflatac’s senior vice president for Europe.

Nicholas Mockett, packaging specialist at Europa Partners said the increases were “very substantial” and seemed “sudden”. He also suggested that it could “kill off some label converter customers” that “don’t enjoy the highest margins in packaging”.

“The users of labels will have to accept these increases as bankruptcy of the converters may leave them unable to sell their own goods. Ultimately, this will be passed on to consumers in higher retail prices,” he said.

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