You should add the «Next Record» field at the start of records 2, 3, & 4. If you use a label merge and format the first label exactly as you want it to appear, then click on 'Update labels' Word will update the rest as they should be. That said, an across-then down output is what one would ordinarily expect from a label merge.

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Cheers,
Paul Edstein
[Fmr MS MVP - Word]