If your business spends meaningfully on print, packaging or marketing materials, there's a reasonable chance a supplier notification about price increases is already sitting in someone's inbox. Before your team approves it, there are a few things worth understanding about what's actually driving costs in this category and what the right commercial response looks like.
The short version is that a combination of structural supply constraints, shipping disruption and supplier pricing behaviour has created a genuinely complex environment. Businesses that respond well won't necessarily be the ones that push back hardest. They'll be the ones that understand the mechanics before they react.
The fragility in the global paper supply chain didn't appear overnight. It has been building since before COVID and critically, it has not reversed.
Stora Enso, one of the major suppliers of paper into Australia and New Zealand, closed two of its largest mills in Sweden and Finland, cutting manufacturing capacity by 35% and removing 1.36 million tonnes of paper annually from global supply. Around the same time, UPM paper mills in Finland went on strike, compounding the reduction. Combined global paper supply dropped by approximately 2.5 million tonnes.
The paper manufacturing capacity that was taken offline during COVID was not restarted. The manufacturers chose instead to reduce supply and protect pricing.
What this means in practice is that the number of significant paper manufacturers in Europe has contracted sharply, with a small number of major players now controlling the remaining capacity. They have no commercial incentive to restart idle mills while the current supply and pricing dynamic continues to work in their favour. For Australian businesses this matters because quality commercial paper — the grades required for catalogues, point-of-sale materials, posters and branded collateral — come almost exclusively from Europe. The materials your business uses for commercial print applications are not substitutable with domestic alternatives.
Even where paper supply is available, the cost of getting it to Australia has not stabilised. Shipping costs were already elevated before this disruption. The COVID-era surge pushed a typical 20-foot container from Asia to Australia from $950 to over $3,000. Ongoing conflict in the Red Sea and disruption through the Strait of Hormuz has since forced commercial vessels onto longer routes, bypassing the Suez Canal and adding significant time and cost to every shipment travelling from Europe. Those increased costs flow directly into supplier pricing.
Currency exposure adds a further layer that's easy to overlook. Most paper supply contracts are in US dollars, which means the AUD/USD exchange rate introduces a variable that Australian businesses can't control and that suppliers will reference when explaining cost increases.
Understanding how suppliers are acting in this environment is the most commercially important thing a CFO can do before responding to a price increase notification.
Industry sources in the Australian paper import market suggest that further price increases across portfolios are likely in the current environment. ERA Group's direct market intelligence points to rises of between 3% and 9% across print categories, while commercial ink suppliers are also lifting prices by 5% to 7%, driven by shipping costs and constrained supply of non-chemical inks.
Based on our conversations with suppliers in the current market, 7% to 12% represents the legitimate pass-on cost range, the bracket within which a supplier can reasonably claim they are recovering genuine cost increases without improving their margin at your expense. Above 12%, the increase is no longer simply a cost pass-on, it's the supplier taking advantage of a market environment where buyers feel pressure and are less likely to push back.
The strongest recommendation in this environment is to resist the instinct to renegotiate. Going to market now means being quoted at today's replacement cost baseline, and any new contract sets that as the starting point for the next term. Existing contracts, including those operating on a day-to-day basis beyond their original term, keep you protected at the older price for as long as the relationship holds. This is an active commercial decision to hold leverage while conditions remain unfavourable for buyers going to market.
Price increases in this environment frequently don't arrive as a formal rate adjustment. They appear as fuel levies, logistics surcharges or new line items that attach to existing invoices without a conversation. A fuel levy of 2% to 3% is standard. A fuel levy sitting at 10% or 12% is margin. Pull the last three to six months of invoices from your top print, packaging and marketing materials suppliers and compare them line by line. Any new charge, or any existing charge that has moved without a commercial discussion, warrants a conversation before the next approval.
Any supplier quoting today is pricing on current replacement cost and a new contract locks in that elevated baseline for the duration of the term. The supply constraints and shipping cost pressures driving today's prices are not permanent features of this market. When conditions shift, the leverage moves back towards buyers and the case for going to market becomes far stronger.
The businesses that come out of this period well won't be the ones who pushed hardest. They'll be the ones who knew when to hold.
This is the kind of insight that internal procurement teams just don't have the time or the market access to develop on their own. If you want independent market intelligence on what's happening in your print and packaging spend right now, book a meeting and let's have a conversation.