Newspaper Society Pushes OFT On Magazine Distribution

The Newspaper Society (NS) has called for the Office of Fair Trading (OFT) to reconsider its opinion on the current system of magazine distribution claiming that losing sales restrictions would pose a threat to smaller retailers.

According to the NS, the loss of passive sales restrictions would result in a dismantling of the system in its present form for both newspapers and magazines. This would have a knock on effect on smaller or more rural retailers, with wholesalers losing sales to a major or multiple outlets having to either reduce or withdraw supplies or raise carriage charges.

David Newell, director of the NS said: “I hope the OFT will rethink and consider industry representations, including the new NS evidence on the potential impact on regional newspapers and their readers.”

It a letter to the OFT the NS said: “The loss of the “traditional” local independent retailer (the typical corner shop/newsagent) or the loss or diminution of the range of product which they carry – has not only a commercial effect upon businesses (not only publishers) who use them as an important part of their retail outlet mix, but also has an obvious social and economic impact on the local community. There is in our view a very real public interest issue here which should not be overlooked and which has not been given adequate consideration.”

Earlier this year the OFT ruled that existing distribution agreements are not compatible with existing competition law, a decision that could lead to a legal challenge from 1 May, when the Department of Trade and Industry’s vertical agreement exclusion order runs out (see Magazine Distribution Faces Shakeup Over New Laws).

The decision was made by the OFT because exclusive regional distribution arrangements between magazine publishers and large-scale wholesalers such as WH Smith and John Menzies are likely to contravene competition regulations by excluding rival wholesalers from supplying specific retailers outside their own area.

Office of Fair Trading: 08457 22 44 99 www.oft.gov.uk