The Sunday Times April 3, 2022 5
BUSINESS
O
n Tuesday, the great and the
good of the literary world
will gather for the first face-
to-face London Book Fair
since Covid struck. Thou-
sands of publishers, agents
and rights executives will
mill around the Olympia
exhibition centre in Ham-
mersmith for the three-day
trade fair, which has drawn more than
800 exhibitors from around the world.
Among them will be the team from
independent children’s publisher Nosy
Crow, who will be promoting upcoming
titles including Max Counts to a Million
and the latest title in its bestselling Felt
Flaps series, Where’s Mr Lion?.
But alongside the glitz of the fair, head
of operations Karina Stevens will be grap-
pling with less artistic concerns: spiral-
ling costs and logistical headaches. “I’ve
been doing this for 30 years and I’ve
never known a supply chain to be this
bad, ever,” she said.
So bad has the situation got that book-
lovers could see the price of a typical
paperback break the psychological £9.99
barrier for the first time.
On paper, the physical books industry
is booming. Despite the continuing popu-
larity of ebooks and surging demand for
audiobooks, estimates from Nielsen
Bookscan show that sales are soaring. An
estimated 202 million books were sold in
2020 for £1.76 billion, while sales in 2021
soared to more than 212 million copies —
the highest figure for a decade — with
sales worth £1.82 billion.
Publishers have reported strong
results across the board as Brits turned to
books during lockdowns. Hachette UK
reported record sales for 2021, while
shares in listed publisher Bloomsbury
have climbed more than 50 per cent since
the pandemic struck. Bloomsbury last
week raised its revenue and profit gui-
dance for the second time in a year as
“exceptional” sales of fantasy author
Sarah J Maas’s latest novel, House of Sky
and Breath — a hit on “BookTok”, Tik-
Tok’s community of bookworms — put
the company on course to “comfortably”
beat expected sales of £212.5 million.
But it is far from happily-ever-after.
Soaring prices for raw materials are caus-
ing widespread pain in all sorts of indus-
tries and publishing has not been spared.
“We are experiencing unprecedented
price inflation across all materials we
purchase,” said Vicky Ellis, sales director
at printer Clays, which prints 150 million
books per year at its site in Suffolk. She
said raw material prices had risen by an
average of 39 per cent. Prices per tonne
have surged as much as 50 per cent for
the two most commonly used types of
paper in book production, according to
industry monitor EUWID Pulp and Paper.
Global production capacity for the
graphic paper used in books has slumped50%
Rise in a year of
the cost of book
paper500600800700900£1,000/tonne2000 2005 2010 2015 20
From October 2021, energy surcharges of up to £100/tonne were added
Source: EUWID Pulp and PaperThe price of uncoated paper used
for black & white books has soaredANNA
MENINin recent years in response to slowing
demand driven by digitisation — a proc-
ess accelerated during the early months
of the pandemic.
At the same time, demand for other
paper products has risen sharply. Retail-
ers are working their way through ever-
greater amounts of packaging amid the
e-commerce explosion, while environ-
mentally conscious shoppers are favour-
ing paper packaging over outmoded sin-
gle-use plastics.
Many mills have found margins to be
more attractive on cardboard and other
packaging, further squeezing graphic
paper production capacity. Surging
energy prices, stoked higher by war in
Ukraine, create further cost pressure.
Reliance on China has also left the
industry exposed to ructions in the
global freight market. Prices for
shipping containers have skyrock-
eted since late 2020, creating
financial and logistical head-
aches for importers.
This has been a particular
issue for publishers of chil-
dren’s and other illustrated
books. While the vast
majority of black-and-
white books sold in the
UK are printed here,
colour books tend to
be printed abroad —
typically in China.
Once a hard-nosed
way of protecting
margins, this has
now become a
liability.
“It was literally
whoever paid the
most got the
space on the
ships,” said Stevens.
A container full of her newly-printed
books was left stranded in Singapore last
year after she was gazumped for space on
a container ship. “We had to wait four
weeks for another ship, even though we’d
paid and had guarantees — they just went
out the window.”
David Shelley, chief executive of
Hachette UK, said the supply chain
crunch was the worst he had seen in his
25 years in the industry. Strain from the
“perfect storm of Covid, Brexit, general
world events and inflationary pressures”
had been compounded by the reading
boom. “We saw unprecedented levels of
book sales — which is a great thing, but it
did mean that the world’s printing
industries struggled to cope.”
Many of these issues came to a
head late last year as publishers
geared up for their busiest time of
year: the run-up to Christmas.
The industry was squeezed
tightly by supply chain pressures
at the end of last year, with pub-
lishers urging customers to shop
early to avoid being caught out by
a lack of stock. Hachette is already
making plans for another chal-
lenging festive period in 2022.
“We can’t now rely on lead times
being what they have been in the
past,” said Shelley, 45.
In last week’s update, Blooms-
bury said it was printing books
earlier and “being flexible
about where we print” to miti-
gate the supply chain crunch.I
ndependent publishers,
such as Juliet Mabey of
Oneworld, are feeling
many of these chal-
lenges even more
acutely: “We have less
economy of scale, for
sure, but often face
the same overheads
[as bigger publishers].”
With a list including works
by Booker Prize-winning
author Marlon James, One-
world has a long-term agree-
ment with its printer, which
has so far shielded it from
increased prices. But ware-housing and distribution costs have both
risen, Mabey said, due to the “double
whammy” of Brexit and Covid. Mabey,
66, is bracing for a 15 per cent rise in
printing costs by the summer. Some inde-
pendents were facing increases of up to
40 per cent, she added.
One such is Fitzcarraldo Editions, a
London-based indie focusing on literary
fiction and essays and known for its mini-
malist Yves Klein-blue covers. Its recent
releases include the Nobel laureate Olga
Tokarczuk’s The Books of Jacob.
“Printing costs are going up rapidly —
and are constantly changing,” said associ-
ate publisher Tamara Sampey-Jawad, 32.
“There’s a complete lack of stability,
which makes it hard to plan.”
While big corporate publishers can
bulk-buy paper in advance to ensure
steady supply, their smaller counterparts
are not so lucky. Price rises are already
steep: a print run last month cost Fitzcar-
raldo 15 per cent more than an identical
one late last year. Strong sales are helping
soften the blow, Sampey-Jawad said, but
if costs continue to climb “we’ll have to
be thinking about different price points”.
“But it has to be an industry-wide
change,” she added. “If we put our books
up and other publishers don’t, then we
are going to lose sales.”
As boss of Waterstones in the UK, and
Barnes & Noble in the US, James Daunt is
the closest thing the bookselling industry
has to an absolute ruler. Daunt, 58, who
also runs an eponymous chain of inde-
pendent bookshops, said price rises are
inevitable: “Paper costs have gone up,
transport costs have gone up, everything
is more expensive.”
He added: “Between us, we will absorb
it. Publishers will absorb some of it, book-sellers will absorb some of it, but some of
it will be passed on [to consumers].”
His shops have changed ordering hab-
its as a result of the pandemic, stockpiling
titles they think will sell well, rather than
counting on being able to restock at short
notice. Waterstones — which recently
acquired bookshop chain Blackwell’s —
can pad itself against supply chain issues
via its significant warehouse capacity,
while Daunt Books has taken over extra
space above its flagship store in Mar-
ylebone, central London.
Daunt said the Covid book-buy-
ing surge showed no signs of
abating. “It keeps on booming... sales are way above what they
were pre-pandemic, other
than in big city-centre
shops.”
Britons have long been
blessed with cheap books.
For almost a century, the eco-
nomics of the industry were
dictated by the Net Book Agree-
ment, which outlawed discount-
ing, giving publishers the final say
on the price of books on shop
shelves. The agreement collapsed
during the 1990s under pressure
from retailers, who are now free to
sell books below their RRP — as large
retailers such as WH Smith, Water-
stones and supermarkets do frequently,
alongside online behemoth Amazon.
But even nominal prices are low. Anal-
ysis of average sales price data from Niel-
sen showed that average RRPs have
largely declined in real terms since 2010.
In the UK, book prices “are set by a sort
of tradition, so they go up very slowly”,
explains Mabey. “Paperback fiction is
typically £7.99 for a crime or romance
novel and £8.99 for almost everything
else. In Europe, it’s minimum €18 (£15).”
But raising prices in the UK would
mean breaching a significant barrier:
pushing the cost of the typical paperback
above £9.99.
“It’s quite a big psychological barrier
for consumers,” said Abi Watson, analyst
at media consultancy Enders. “No one
wants to be the first mover.”
However, such a move is overdue,
Mabey said, because books have not
increased price alongside other paper
products. “No one really wants to put pri-
ces up, but notebooks can be £15 or more
— and they’re blank. Birthday cards can
be £3.50 now, yet you can buy a paper-
back in the supermarket for £4.99.”
F
or Daunt, these pressures are simply
the latest episode in the “cutthroat”
book business — and he has little
patience with publishers’ com-
plaints.
“I don’t see anything existential in this.
I’ve been doing this for ever — for well
over 30 years — and I do not remember a
single day in all of those years in which
publishers haven’t wrung their hands
and said, ‘Woe is us, the end is nigh.’ And
it never has been.
“Perhaps they occasionally have to
downgrade the splendour of the restau-
rant in which they have their lunch. But
otherwise not much changes.”
He added: “We are all selling more
books than we’ve really ever sold before,
and that’s just fantastic. This is a moment
of great buoyancy across the entire
industry... and we’re all, true to form,
wringing our hands.”
Publishers, however, maintain they
have reasons to be concerned. “Given
everything going on at the moment, I see
no reason why any of the costs will go
down,” said Shelley. “I would anticipate
them going up in the coming year.”
For Stevens, book price rises are now
inevitable — it is just a matter of who
blinks first.
“The whole industry is having the
same conversation internally,” she said.
“Everyone’s waiting for the big trade pub-
lishers to make a move.
“Businesses can’t maintain this level of
cost increase — and it’s not going any-
where. Everyone’s asking themselves,
how long can we continue like this?”As the London Book Fair looms, the talk is not about a hot new TikTok book craze, but runaway costs
A new chapter for publishers: will
paperbacks bust the £9.99 barrier?
212m
Number of books
sold in the UK in
2021 — the most
in a decadeReaders can still
buy books by
writers such as
Marlon James,
Sarah J Maas
and Olga
Tokarczuk
for less than
a tenner, but
production,
shipping and
materials
costs are all
combining to
threaten that
price pointILLUSTRATION: PETE BAKER£15
Typical minimum
paperback price
in Europe