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Article | August 31, 1995
Part 2How purchasing copes with higher prices (sidebar)
Purchasers skewer vendors with increasing prices
purchasing manager dairy "Vendors need to help us find alternatives to our current packaging needs (ie. mottled/clay-coated paper for bleached board)." purchasing agent sanitation products "I truly believe increases have gone beyond need and reached the point of greed. Corrugated suppliers are telling customers that they are getting back to the price levels of the late 1980s. Although that may be true those prices were over-inflated at that time."
sweetener manufacturer "The short-term greed of the paper mills will have an adverse long-term effect on their future earnings because they are putting a lot of people out of business. Many paper converters in the chain have no control over all of this insanity."
senior packaging buyer
As part of the survey Packaging World asked respondents what point they would like to make to vendors that have increased prices. Many of the responses asked for more justification for price hikes and for more alternatives. Those were the two predominant answers. Other purchasing people were more angry and some more creative. This is a sampling of comments ranging from the most accommodating to the most venomous:national purchasing manager food oils manufacturer "We need to work together to avoid the peaks and valleys in packaging costs. There is a level playing field where all can make a profit and we need to find it. It does us no good to put each other out of business."
director of purchasing cosmetics manufacturer "Price increases not based on true cost increases are unacceptable! We cannot increase our prices to the trade based on profit restoration motives." purchasing manager coffee manufacturer "Be kind. One day soon it will be a buyer's market again." buyer toiletries manufacturer "The corrugated board industry is corrupt." purchasing manager chemical packager "I feel in general the paper industry has done a very poor of 'forecasting' demand and supply. Where are all their market analysts who we the customers are paying for (so we are told) to determine future price escalation." director of purchasing sun care products In small print: "Seems to be collusion in some areas." vice president of purchasing pet food maker "I'll see you the first day of the downturn."
vp of purchasing
dairy products maker
"We have reduced changed recycled improved downsized and threatened until we have squeezed all the 'fluff' out of our packaging costs. The large price increases on almost all packaging would appear suspiciously contrived by the major companies."
purchasing quality engineer
"Don't try to tack on other increases (ie. labor utilities etc.) onto legitimate cost increases like resin and linerboard."
vice president purchasing
"Customers and consumers will eventually tell us (by not buying our product) when too much is too much. When we lose business then so will our suppliers."
corporate director of purchasing prepared foods maker
"Be at my door for price decreases when resins and linerboard starts its down cycle as quick as you were on the way up!"
frozen foods company
"Industry scuttlebutt is that the latest round of corrugated price increases is greed-motivated. I've also heard that the Fed may step in and regulate corrugated pricing. This is what I tell all my vendors: make your margin but don't pad it. Someone else out there wants the business at a reasonable margin."
director of purchasing
"About changing vendors more than once changing material specs: I answer 'no' for the last six months 'yes' for the next six months."
"The current paper prices are robbery. I'm told the reason is that paper can be sold for more money in Europe. If people here want it they must be prepared to pay what is asked for it. The almighty dollar triumphs over ethics and morals yet again."
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