Bong UK, the Swedish-owned manufacturer, will raise its prices by 8.5%, while Chapman Envelopes will put up prices by 9%.

Bong UK and Bong Ireland business unit president Sue Hale said the company had suffered from a dramatic decline in prices over the past two years.

There had also been an overall decrease in demand for envelopes in Europe, she added. Bong had implemented group-wide cost-saving actions but these had failed to compensate for the erosion of margins.

Chapman Envelopes sales and marketing director David Lee endorsed Hales comments: Someone has to do something, he said. We had already planned our increase prior to Bongs statement, which came as a surprise to us.

He said the increase had to hold, otherwise a lot of companies could go under.

Hale also hoped the price increase would be sustainable. If its not I dont know what the alternatives will be, she said.

Chapman Envelopes is based in Darwen, Lancashire, and is part of GPV Group.

Bong UK employs 163 staff at its Milton Keynes base, and a further 48 staff at its Ireland base.

Story by Andy Scott