ACS

The Association of News Retailing (ANR) is asking publishers and wholesalers for assurances that retailers currently operating on or around Minimum Entry Level (MEL) for newspapers will continue to receive supplies. ANR’s action follows yesterday’s announcement by Competition Minister Gareth Thomas that the Government had accepted the recommendation made by the OFT to release wholesalers from the undertakings given by them in relation to the newspaper Code.

ANR Managing Director John Lennon said: “Without a statutory obligation to supply, wholesalers may be tempted to price ‘hard to serve’ retailers out of the market by increasing their carriage charges to unacceptable levels. We are working to ensure this doesn’t happen so that retailers can continue to operate even without protection from the Code.

“Our concerns are compounded by recent contract changes that we believe will ultimately see newspaper and magazine wholesaler Dawson News exiting the market, giving the remaining two wholesalers, Smiths News and Menzies Distribution, unprecedented supply chain power.

“The OFT has taken several years to make recommendations or the news supply chain, but all the while the wholesale market has been consolidating to the point where we are heading towards a virtual duopoly. This makes this week’s decision to open up the market to passive selling irrelevant to most retailers who will not be able to receive magazines from an alternative source because the wholesalers who could have provided this service are now out of the market.”

ANR will play a full part in OFT’s ongoing consultation on its provisional decision not to refer the news supply chain to the Competition Commission.

John Lennon added: “With retailer choice no closer to becoming a reality, it may be that a full Competition Commission inquiry is the best way to meet this longstanding objective.”

Contacts:

John Lennon Managing Director, ANR
07812 144439

Shane Brennan Public Affairs and Communications Manager
01252 515001 / 07921 372 978

Nina Collins Communications Coordinator
01252 515001

Julie Kirby/ Grappa PR
Michael Saxton 020 7602 9222

Notes to Editors:

1. The Association of News Retailing (ANR) was set up in 2001 as the news and magazines arm of the Association of Convenience Stores (ACS). ACS is the convenience store champion, helping local shops thrive through lobbying, insight, information and commercial services.

2. Removal of the Code removes the obligation to supply any retailer who achieves the Minimum Entry Level (MEL). The removal also removes the rules that restrict passive selling within wholesalers’ exclusive territories. MEL applied to newspapers only, but many MEL retailers also receive magazines from the same wholesaler.

3. Dawson News has lost a number of key magazine and newspaper contracts placing their long-term viability in doubt – ref Guardian: http://www.guardian.co.uk/business/marketforceslive/2009/mar/24/3

4. The OFT are undergoing a consultation period to review their decision not to refer the newspaper and magazine industry to the Competition Commission. Interested parties have until 19th May to make representations to the OFT.