$10 million Qantas print contract flies away from IPMG

IPMG’s decision to stand its ground against fixed costs on print leads to loss of Qantas contract.

The airline this week announced that its print management contract has been won by TMA. The two-year agreement with a one-year option is expected to generate up to $10 million of annual revenue for the group, and is in addition to TMA’s existing contract with Qantas.

“The contract represents further expansion of our print management presence in the marketplace and allows TMA to continue to grow on its strong B2B foundation,” said TMA’s managing director, Anthony Karam. “Print management continues to be an area of growth for the group.”

The news was a major blow to IPMG, whose print management division, SYNC Communications, has a fifteen-year history of servicing Qantas. “We are extremely disappointed in this decision,” said Stephen Anstice, chief executive officer.

According to Anstice, Qantas’s review of its print requirements was driven by its procurement transformation program, a process driven by the need to reduce organisational cost by $500 million.

“To achieve this, Qantas employed the services of an external consultancy whose single goal was to reduce the cost of noncore goods and services, including Qantas print collateral,” he said.

“Respondents to the tender were asked – amongst many other concessions – to source pricing from low-cost countries. IPMG, as a large employer, supplier and supporter of Australian print industry, chose not to comply with this requirement.”

Anstice added that IPMG was also requested to agree on fixed costs in both material and labour for an extended period. “In our view this is simply not possible,” he said.

“These factors have obviously worked against us in the evaluation process.”

A spokesperson from Qantas told Print21 that: "We understand that IPMG/SYNC Communications is disappointed in the outcome. We can confirm that the package of work awarded to TMA is services 100 per cent on shore."

Printing Industries has reacted with anger over the news and is seeking an urgent meeting with Qantas to discuss the issue. CEO, Philip Andersen, said he was both alarmed and concerned about the Qantas tender.

“For an iconic Australian company like Qantas to insert such a clause in its latest print tender is totally unacceptable to us and, we believe, will be unacceptable to the tens of thousands of print industry workers and the Australian public.,” he said.

Printing Industries national manager for policy and government affairs, Hagop Tchamkertenian, said the Association was gearing up for a campaign to persuade Qantas to remove the controversial clause from future printing tenders.

“We are also making representation directly to the Qantas Board highlighting our concerns and the concerns of the industry,” he said.

“Besides the potential impact on local industry, Qantas must also realise that printed work done offshore is unlikely to abide by the strict labour, occupational health and safety and environmental standards that apply to local printing work."