Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, October 28, 1995 TAG: 9510300019
SECTION: BUSINESS PAGE: A-8 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
The probe is being conducted by antitrust investigators, said Justice spokeswoman Gina Talamona, but she declined to release details, including the names of companies or individuals who might be the targets.
The investigation began after complaints from newspaper publishers, according to the Justice Department.
Rising newsprint costs have been cited in the shutdown of some papers recently, including The Houston Post, and in staff reductions at others.
After price increases of more than 40 percent this year, newsprint producers say they are preparing for a new round of increases.
Newsprint typically accounts for about 20 percent of a newspaper's expenses. Publishers have been taking steps to reduce their consumption by trimming page size and eliminating distribution far from home bases.
Three newsprint companies this month told U.S. customers they will be raising list prices by as much as 9.7 percent starting in February.
The Newspaper Association of America issued a statement Friday saying that the entire newspaper industry ``has felt the pain of record escalations in newsprint prices that have exceeded 40 percent already this year.''
The investigation caught one media industry analyst by surprise.
``How could there possibly be collusion in a commodity business with intense competition among players?'' asked George F. Shipp, first vice president of Scott & Stringfellow in Richmond, who follows Gannett Co. Inc.
Most of the newsprint used in the United States is produced by about three dozen companies.
Shipp said newsprint manufacturers have seen a soaring increase in demand, partly from Eastern Europe and the former Soviet Union.
by CNB