Woodfree coated paper buyers are surprised and concerned by a 5% price rise from Sappi Fine Paper.

A letter sent to customers, signed by UK sales office joint managing director Chris Diacon, attributed the increase to the rising accumulation of production costs at Sappis mills.

We have had a long period of stability in terms of our selling prices, but unfortunately a number of costs have gone up, such as transportation and energy, he added.

Diacon said that although the 5% increase was not large, there was bound to be resistance from some buyers.

Steve Wehrle, production department paper manager at BBC Worldwide, said: They can try to put this through, but I dont think the market will wear it.

Wehrle said that the BBC would not be hit by the increase, thanks to its yearly agreement with merchant M6 Paper.

M6 group sales and marketing director Jeremy Martin said he was due to have a meeting with Sappi in the next few days, at which pricing would be discussed.

Being a major customer of the Sappi group, obviously we try to work closely with the company on all matters, and it will be interesting to see what happens over the next few weeks, said Martin.

Another group paper buyer said he was quite dumbfounded by the news of the increase: Its not tenable and it is completely unwarranted, he said.

The new prices, effective from 1 October, are set to be maintained for the next six months and will be effective across the European market, with slight adaptations to specific country locations.

Story by Andy Scott