OFT signals mag distribution shake-up

The Office of Fair Trading issued a draft opinion today which could have huge effects on the magazine industry.
 
It has concluded that the current territorial
monopolies enjoyed by magazine distributors may be unfair competition
and that “retailers
should be free to seek better deals than those offered by the
appointed wholesaler for their territory”.
 
The current system of regional distribution
monopolies favours smaller retailers by making everyone pay the same
price for magazine distribution. If this changes, some fear that the
big retailers will negotiate better deals leaving the smaller players
out in the cold.
 
The OFT has concluded that the same system
governing newspapers, which ensures all retailers get the full range of
titles, should not be changed.
 
In a statement the OFT said: “In the case of
magazine agreements the OFT believes that territorial exclusivity but
not the further restriction of absolute territorial protection is
likely to satisfy the criteria for exemption. Retailers should be free
to seek better deals than those offered by the appointed wholesaler for
their territory. Absolute territorial protection prevents alternative,
and potentially more efficient, arrangements for magazine distribution
emerging.
 
“Where substantial efficiencies arise from distributing magazines
jointly with newspapers, as will often be the case, joint distribution
is likely to continue naturally, unforced by anti-competitive
restriction.”
 
The OFT’s draft opinion is open for consultation until 17 June. It will then publish its final opinion.
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