Warnings fail to halt OFT's march towards deregulation

By Alyson Fixter

Magazine publishers have criticised the Office of Fair Trading (OFT)
for pushing ahead with new plans for magazine distribution, despite
warnings that thousands of small newsagents could close.

Members of industry body the Periodical Publishers Association
(PPA), along with newspaper publishers and wholesalers, have jointly
pledged to fight the OFT’s latest advice that current laws on magazine
distribution are anti-competitive.

PPA members, including Condé
Nast managing director Nicholas Coleridge, have been campaigning to get
the OFT to change its opinion, but so far the industry watchdog has
refused to budge.

In its latest draft opinion, it said newspaper
wholesalers were likely tocontinue with their existing exclusive
arrangements – which ensure all newsagents, whatever their size, have
access to the full range of titles – but that the market would be
opened up for magazine wholesalers.

In a joint statement, the PPA and Newspaper Publishers Association said they had “strong and continuing concerns”

about the opinion, and that opening up the market for magazines was likely to affect newspapers as well.

They
added: “Previous analysis of the market undertaken by Professor Paul
Dobson of Loughborough University has shown that ending the current
economies of scale by stripping out magazines would increase the
overall cost of supply – and that the effects of such a change could
lead to as many as 12,000 retailers exiting the market.The statement
quoted Professor Dobson as saying: “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 industry now has until 17 June to comment on the advice.

In
recent weeks Coleridge, who chairs the PPA, has criticised the OFT for
its “bureaucratic and slow” dealings with the industry and singled out
the OFT’s chairman for refusing to answer letters personally or meet
with industry figures.

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