As the industry struggles to come to terms with the dual problem of the deepest recession for decades and saturation in the replacement window market, Pilkington have sent the following letter to its customers informing them of impending price rises:
As you will be aware, the demand for raw glass in the UK in the last year has declined to unprecedented levels and revenues have fallen dramatically along with demand.
Pilkington has taken action to reduce its cost base and to try to balance output and demand. The Company ceased production on one float line in St Helens last October and has also closed five downstream branches across the UK. However, both demand and prices have continued to fall and despite the cost reductions, glass manufacture and supply has become uneconomic and the Situation cannot be sustained. As a result we have taken the decision to urgently and substantially increase the price of our raw glass. We understand that this will put pressure on our customers in the short term but we hope that you will recognise that it is vital in the long term to return prices to a viable level.
We will apply increases to the prices of glass products supplied by Pilkington in the UK & Ireland, commencing Monday 8th June 2009. Therefore, please be advised that, with effect from that date, price increases will be applied to all deliveries of glass products from Pilkington Building Products UK.
I’ve not included the full list of items to be increased, but the highlights are:
Pilkington Optifloat Clear 3mm-12m +50%
Pilkington Optiwhite +25%
Pilkington K Glass and Pilkington K Glass OW +10%
Pilkington Activ, Pilkington Activ Blue and Pilkington Activ Neutral +10%
In a period of deflation and increasingly cut throat competition, are installers likely to pass this price increase on to consumers? Of course not, so basically, Pilkington is forcing lower margins onto it’s customers.
Of course, if there was competition in the float glass market then we could switch to other glass suppliers, but as they work as a cartel then Guardian, Saint Gobain and Glavabel will follow suit.
Please leave your feelings on the latest Pilkington price increase below, or alternatively feel free to vote on whether you feel there is still a glass cartel in operation in the UK.
so what would happen if everyone switched to saint gobain, or similar? i will be suggesting this to my two suppliers. this increase is borne out of greed, no more and no less.
What a surprise , most customers are requesting A rated units and the biggest increase of 50% is on Optifloat and 25% optiwhite ! No surprise there !!
Thinks to back to major price hike of K glass when fensa regs came in !
If only we could persuade every company to switch to St gobian or similar and left Pilks on their own, we would then find find the cartel busted, Pilks would under cut the others just to win some business back but fo course this will not happen, Pilks biggest customers will just negotiate a better discount and this price rise will not effect them.
Is Optifloat there standard float glass, or is it a low iron glass?
I would normaly suggest we complain to our local m.ps but they would only be bought off with the promise of glass duck house !
I think back 20 years ago when we paid over £18 sq.metre for standard float glass and £35+ sq.metre for standard toughened.
Of course back then we would sell for £4500 what we would now sell for £3000.
We now pay less for glass, profile, hardware and all other materials that go in to the manufacture than we did 20 years ago! I do understand however that this has partly been made possible due to modern technology and efficiency.
I always believe that everything does a full circle and that prices will be forced back up somewhat, at some point.
I’m not saying that I agree with Pilkington’s price rises, it’s no benefit to me, however I do believe that they need it. It is very bad timing though.
We always immediately pass on any increases to our customers and always will do. You’ve just got to have it for those figures to work I’m afraid.
Seems a shame, that these companies can do this.
They do something wrong, and you the trade and customers pay for this, what did
they do.
And what brought about, the Increase well, have they not just been fined by the European Commissioner, for something like £100 million, for ?, Running a glass Cartel, as reported
http://business.timesonline.co.uk/tol/business/industry_sectors/industrials/article2963656.ece
So the Baddies, in Business although get fined for doing some thing that is a criminal offence get away with it, then, start clawing it all back from the likes of you and me.
MY STANCE, IS DONT BUY ANYTHING FROM THEM,
Are any labour MP`s shareholders in pilks ?
I haven’t received the letter yet but as soon as it arrives I’ll be switching my glass supplier.
That’s not very helpful to you guys. I’m not familiar with the terminology but the biggest rise items – are they these ‘glass walls’ you see in new architecture or do they refer to what I would call standard upvc house window panes?
I agree with David Bingham’s summary. A deflationary pricing cycle cannot go on for ever. Efficientcy savings and competion only last for so long before financial realism must be faced.
Nippon glass are now setting out to recover the investment made in purchasing Pilkington.
On another point, regarding Pilkington’s £100m fine from the ECC for operating a cartel, surely a fine of this magnitude can only be paid ultimatly by glass trade customers by way of increased prices?
lets hope pilks go under leaving more honest glass suppliers to work with
I would just like to respond to the comment made by Mike Harvey-Smith that the increase will not affect the big companies, I work for a large sealed unit manufacturer and we are not immune to these price increases mainly because we have no other choice but to buy from Pilks or Saint Gobain who incidently have just announced to us that our prices will be going up by the same amount. I also understand that prices have fallen to a level that cannot be sustained and prices need to rise, but what annoys me is that Pilkington’s give us all a big price hike and then low and behold their down stream branches then attack our customers with stupid prices and they then confirm that they will not be raising their sealed unit prices, in fact I have had one today where they are including the optiwhite and the Argon gas for free and holding the prices for 6 months, if anyone can tell me that £17.00 Sq.Mt for the above product is a price that is sustainable then I will eat my hat. It is obvious to me that the independents are being squeezed out of the market. Sorry Mike I am not having a go but we are all in the same boat.
Saint Gobain has already informed its customers of their intended increase, which will be the same as Pilkingtons. The others will follow soon anyway, despite the trouble they got into last year over price fixing. I suppose in the current climate they feel it’s justified. Whether a rise of this magnitude is needed should be open to questioning.
thats a big shame
In the last round of price fixing it was reported that anyone who had suffered from the illegal activity could claim compensation through the national courts from the guilty party.
Well everyone glass processor who had purchased raw glass material from Pilks or SGG had clearly suffered!
Did anyone actually make a claim?
No, well maybe if they had then Pilks & SGG would think twice before trying it again!!!
I urge anyone who has been sent a price increase letter from their raw material supplier (Pilks & SGG) to keep it on file, this is evidence and your ticket to having that price increase refunded next time they are in court and slapped with a big fine.
Don’t let them get away with this, we can put them on notice regarding this matter and make them so sh*t scared of all the legal claims that this type of price fixing behavior will be a thing of the past!
Well said Scott.
I AGREE TOTALLY WITH SCOTT. WE R IN TOUGH TIMES .PILKS WILL SEND MY COMPANY INTO LIQUIDATION .MY CUSTOMERS DONT WANT TO PAY PRE INCREASE PRICES .WE DONT NEED THIS NOW .50% IS A CON .
When i had my windows fitted, this Cartel was in full swing, i am just a normal customer who had windows fitted, i cannot say, by which Company as i don’t think, the owner of this site, likes me to mention the Companies name.
As they too have been very very Naughty Boys, and now under investigation.
I Wonder if the general Public, can go back to these window companies, every last one of us,
And say, hey, remember when you installed my windows, i was been over charged by the Cartels that supply you with the Pilkington Glass,
I Wonder can we claim back, these price rises that were illegally obtained by Pilkington, during their feeding frenzy, on all of us, plus get back our interest for these years upto their finds.
Should we all get together and put in a class action. to get every last penny back, is there anyone out there that thinks this is possible, if we get together millions of us, would they stand a chance. we could all pay say £1, each, millions of us, and get the cream of the Barristers, working for us. what do you think. is it possible, we all know that by working together we can make things happen.
Like the exposure of the rot in Westminster, I hope that the corruption in our industry gets the same. Pilks have become a dictatorship and actively steer the Governing bodies as and where they can. WER’s in the name of energy conservation – what rubbish – its just another way for them to front row their products. All this bull**** is killing our industry as we watch it being centralised at the expense of the small manufacturer.
Yes we need to be thinking about the environment, but we are talking about ‘windows’ not third world coal fired power stations. Laughable though it is, as my family and I sleep with our windows open, I often wonder when the the Anti-open window police will descend upon me!
We have completely lost our way with all this nonsense. There are too many laws, we need to get back to ‘Codes of Practise’ that is, systems that are easily recognised, understood and workable.
This is no longer a free market – it is totally corrupt and collectively we must do something about it.
This is nothing more than we should expect from Pilkington Glass and its Japanese parent company, Nippon Sheet Glass. These two companies have the corporate culture of the gutter. I will certainly now be changing my supplier.
I’ve just told my glass supplier that I’ll only be buying SGG but even their prices are going the same way ? And what do you do about Patterned Glass???
We cannot accept this increase lying down like we have accepted all the other price hikes.
The 50% hike will bring business to its knees.Ireland & the Uk must stand shoulder to shoulder and protect our business,staff and families.These boys need manners put on them.
We have dropped our prices by 50% already!
Phil jennings post was great..
Just after reading your idea for litigation..good one.
Similair happened here with AiB Bank with over charging customers on there accounts.
They lost and had to repay all the people they had overcharged.half a million i think..few quid there ha ha..i will look into it and find out more!
[...] Read more information and opinions on this subject at Renegade Conservatory Guy [...]