Distribution free-for-all 'will raise prices and close shops'

By Alyson Fixter

One of the UK’s leading business economists has condemned the Office
of Fair Trading (OFT) proposals for the future of magazine
distribution, calling them “a charter for supermarkets to increase
their profits and small newsagents to be put out of business”.

The OFT announced two weeks ago that it was considering scrapping
the distribution deal that forces wholesalers to make sure independent
newsagents getis likely that the OFT will lift the exemption in April.

Professor
Paul Dobson, of the University of Loughborough, has in the past
estimated that the move could lead to between 12,000 and 20,000 of the
UK’s 54,000 magazine outlets closing.

He said: “Small retailers
are mistaken in their belief that publishers will be able to protect
them once supermarkets seek to take control of magazine distribution.
Publishers’ hands will be tied by the OFT decision. There will be
nothing they can do to stop the dam from bursting.”

He added: “I
can see no benefit to consumers but rather considerable consumer
detriment if the current proposals are not reassessed.

“This move will otherwise inevitably lead to consumers facing higher prices and less choice.

“People
living in rural and socially deprived urban areas will be particularly
hard hit when this results in the closure of their local shop.”

The
OFT has controversially claimed that while newspapers should continue
to have an exemption from the law, because wide access to news is
important to the public interest, magazines do not meet the same
criteria.

the same access to titles as big chains.

The deal breaks European competition law and only continues to exist under a special exemption. However, it

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