HomeCommentEditor's Memo

Editor’s Memo

Monstrous monopolies

A MOUNTING threat to the newspaper industry is emerging in the wake of the country’s still-untamed inflation rate. If it remains unchecked, it will not only cripple newspapers

but also harm an important vehicle of education and information – one of the props of democracy.

I am talking about newsprint costs. All the major titles in the country are already hard put to balance the growing costs of production.

Our readers have to brace themselves for another round of increases in the cover price of the Zimbabwe Independent. It is a debilitating business to me because I believe news should reach target audiences without them feeling the pinch in their pockets.

I consider the failure by the general public to access information due to the high costs of media as an assault on their freedom to access information.

The rule of thumb is that the price of a newspaper should be such that it does not compete with goods and services required for basic sustenance.

South African newspapers circulating in Zimbabwe, the Mail & Guardian and the Sunday Times, are now priced cheaper than newspapers printed and published here. The two papers now cost $15 000 and $20 000 respectively.

The Zimpapers stable this week increased the cover prices of all its publications by at least 50%. We will be following suit next week probably together with our competitor, the Financial Gazette. The price of the Independent will be going up to $20 000.

It is an understatement to say that there is a crisis brewing in the newspaper industry due to the ballooning production costs fuelled by the unremitting increases in the price of newsprint. The sole manufacturer of newsprint, Mutare Board & Paper Mills, has not hesitated to pass on its production costs to publishing houses.

The rate and frequency of increments this year have been excruciating to say the least. Where is the Competition Commission in dealing with this damaging monopoly?

Since February, the paper manufacturer has raised the price of newsprint from $7 576 472 to $16 632 038 a tonne, with the latest increase coming on Monday last week. Another hike had been dumped on publishers on June 1! The price of newsprint has gone up 120% since the beginning of the year. There is a good likelihood that the cost of producing newspapers could go up by over 300% this year alone if the current trend is maintained.

The total increase for the whole of last year was about 100%.

Newsprint is the principal raw material of a newspaper and together with printing costs should account for about 30% of total production costs. At our sister publication, the M&G, newsprint and printing costs amount to between 25% and 30% of the production bill.

The figure here is 73%. We have therefore been forced to raise the cover price to mitigate the effects of the escalating production costs. The rate of increase in the cover price is however still way below that of production costs.

For example, at the launch of the paper in 1996 street sales alone were enough to cover all production costs and in some instances pay salaries.

Revenue from advertising all headed for the bottom line on the balance sheets.

During that period, the wheels of industry were still turning in the right direction. There was high consumer demand for goods and services. There was competition among retailers, hence ad-spend was large. By the way, inflation at the time was around 15%.

This was a period when we had the luxury of using imported newsprint which did not turn yellow in less than a week. The printing stayed sharp even after the newspaper had gone through dozens of hands and picture reproduction was brilliant (even though pictures were largely black and white).

Today we pay a premium for poor quality newsprint that breaks constantly during printing and jams the printing press. The paper cannot sit in the hot sun for long without changing colour.

The paper manufacturer has just told us they can no longer supply the peach newsprint used to print the businessdigest because of the shortage of the dye used to colour the paper. We have no idea what’s next in store!

But the cost of this deteriorating service and products has kept going up like everything else in the country. We are buying expensive bread which appears to have been manufactured from chicken mash. Bakeries are selling meat pies with anything but meat for stuffing. We pay a fortune to garages which pretend to service our vehicles only to steal fuel and fail to fit promised new parts.

We also pay huge taxes to a government which has failed to provide basic health, education and infrastructure to the nation. Then there are things like road tax and carbon tax that are not used for their intended purpose.

We have grown to accept this as normal.

We however promise to provide a good read every week even on poor-quality paper because we have a professional obligation to do so. Please bear with us.

Previous articleEditor’s memo
Next articleComment

Recent Posts

Stories you will enjoy

Recommended reading