Printing Industries has made series of recommendations to the federal government to stamp out fraudulent companies that become insolvent, leaving a series of unpaid debts to only to re-emerge and resume trading under a different name.
Tim Michaelides, managing director of Melbourne printer Complete Colour Printing, told ProPrint that all printers are hurt because of “certain companies offering stupid pricing because they don’t intend paying their debts”.
“It drives down the price in the market, because the market has become totally accustomed to paying that lower price,” Michaelides said.
“There’s not enough demand out there, and you’re competing against businesses that are willing to run their business at a loss,” he added.
“There’s got to be a point where someone’s willing to sell at a certain price, and a point below that where they’re not. And a lot of companies don’t know that cut-off point,” he added.
Michaelides added that printers can also be the victims of phoenixing from print buyers.
“If I walk into a printer and say I’ve got a job for 50,000 10pp booklets, I’d say 70-80% of printers would welcome me with open arms.”
“But if I tried doing that with a bank, they would take the time to find out everything about me,” he said.
Michaelides said the federal government had to “react more quickly” in recovering tax debts from phoenix companies, but that the industry also has to take responsibility for aiding such practices.
“My biggest issue is that printers are the biggest suckers when it comes to giving credit to people,” he said.
“As an industry, people have got to be more diligent in the people they give credit to, and how they give that credit,” said Michaelides.
CPI Paper managing director Bernard Cassell (pictured) told ProPrint: “I doubt there’s a merchant in the country that hasn’t been caught out by one over the years.”
Cassell, who is chairman of the Australasian Paper Industry Association, said the industry had to take a stand and refuse to supply phoenix companies.
“It every merchant and supplier refuses to deal with these companies, life will become more difficult for them,” he said.
“If someone has given CPI a bad debt, there would have to be something extraordinary for us to supply them again,” added Cassell.
Printing Industries’s recommendations to government include removing limited liability protection and expanding penalties for directors involved in phoenix activity.
Hagop Tchamkertanian, the association’s national manager for policy and government affairs, said the recent Derwent Howard collapse has spurred the debate. He described phoenixing as “un-Australian”.
“In recent examples suppliers of paper and other printing industry consumables as well as printing companies have been offered as little as 5c in the dollar by appointed administrators for the outstanding debts of liquidated companies,” he said.
Tchamkertenian said that phoenix-related activities cost the Australian economy more than $3.3bn each year.
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