JUSTICE PROBES NEWSPRINT PRICING

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The U.S. Justice Department's antitrust division is looking into possible anti-competitive practices in the newsprint industry.

So far no action is pending on the pricing of coated groundwood used by magazines and catalogs; the department is probing pricing in the uncoated free sheet industry.

Newspaper publishers have been particularly vocal about what some felt was "price gouging" by newsprint suppliers. Newsprint pricing was raised at the Newspaper Association of America board meeting Sept. 12.

Last week the NAA said, "The entire newspaper industry has felt the pain of record escalation in newsprint prices that have exceeded 40% this year," but disavowed any further knowledge of the probe. Justice said the investigation resulted from newspaper publishers' complaints. The European Commission began a similar probe six months ago.

Newsprint typically makes up about 20% of newspapers' overall cost of business and about 10% of consumer magazines' costs.

In February '94, newsprint was selling for $420 per metric ton; last month, it was $750, according to Pulp & Paper Week.

For the magazine industry, there have been five consecutive quarters of price increases. The latest increase on No. 5 34-pound groundwood pushed the price to just under $1,400 a ton, compared with $890 a year ago.

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