Interchangeability and Customer and Producer Perceptions
In the previous investigations pertaining to coated groundwood paper, it was noted that because printing characteristics are unique to each type of graphic paper, they were rarely substituted. The Commission’s report continued, “most buyers decide upon the printing effect, both visual and tangible, they wish to achieve and select a paper accordingly. Switching may occur, if another type of paper better suits their needs or constraints, but most publishers – particularly those of recurring products like magazines and catalogues – are neither indifferent nor capricious as to their choice of paper.”57
With respect to the interchangeability of CFS and coated groundwood, the available information in these investigations generally supports the earlier assertion. Customers reportedly view CFS as more suited to prestigious applications such as annual reports, high-end catalogues and magazines, and high impact direct mail.58 Interchangeability is inherently restricted because CFS is generally not available in basis weights less than 45 pounds and there are only three common basis weights (45, 50, and 60 pound).59 Technical improvements made to the groundwood pulping process since 1991 have not altered the basic distinction between groundwood and freesheet paper or increased the substitutability of one for the other.60
One U.S. CFS producer asserted that high brightness, coated groundwood grades have attempted to substitute for CFS with moderate success but that a more typical occurrence was the catalog or magazine publisher who switched from CFS to coated groundwood as circulation increased to save postal costs.61 In the market for gift wrap base stock, where CFS and coated groundwood do compete, coated groundwood is used more for holiday gift wrap than for everyday gift wrap. CFS is preferred for everyday gift wrap because it will not yellow if held by the consumer for an extended period of time.62
With respect to uncoated free sheet, the general perception is that CFS is a superior product because it prints better than uncoated free sheet.63 The petitioner asserts that CFS and uncoated free sheet are not interchangeable in the market place expressly because of the difference in image quality of the printed sheets.64 Other U.S. producers tend to support this assertion noting that customer applications often require either CFS paper or uncoated free sheet65 and that for certain uncoated free sheet end uses (e.g., carbonless and thermal base stock), CFS paper is simply not suited.66 Another producer stated that CFS paper and uncoated free sheet were technically interchangeable albeit with significant differences in the print quality, surface feel, and appearance of the finished products.67 One producer’s sales staff emphasizes the sale of coated products over uncoated products due to higher margins and less competition.68
57 Coated Groundwood Paper from Belgium, Finland, France, Germany, and the United Kingdom, Inv. Nos. 731- TA-487-490 (Final), USITC Publication 2467, December 1991, p. A-9.
. *** producers’ questionnaire response, p. 11. *** producers’ questionnaire response, p. 8. *** *** producers’ questionnaire response, att. II-3f. *** producers’ questionnaire response, p. 8. *** producers’ questionnaire response, p. 7, Stora Enso response, p. 7, NewPage response p. 9. *** producers’ questionnaire response, p. 8. *** producers’ questionnaire response, p. 7 *** producers’ questionnaire response, p. 7. *** producers’ questionnaire response, p. 7. *** producers’ questionnaire response, p. 8.