Wholesalers shunned

As the publishing industry awaits the long-delayed OFT decision on
the future of magazine distribution, the company that runs distribution
for Bauer, Emap, BBC Worldwide and Haymarket has angered independent
wholesalers by severing links with all of them in favour of three big
companies.

Frontline announced the decision late last week,
saying big wholesalers like Menzies and WHSmith could work “more
flexibly” – but the eight independent companies said the decision made
the entire OFT inquiry irrelevant.

The OFT is due to announce
soon whether it believes current distribution arrangements are
anti-competitive: they run on a series of regional monopolies in
exchange for the guarantee that the full range of titles is available
to all newsagents nationwide.

But the wholesalers said that even
if the watchdog wanted to open the market up to competition, there
would no longer be any competitors in existence because they all faced
bankruptcy after losing their contracts.

Frontline’s managing
director Simon Curtin said: “The results of the tender process mean
that we are left with three stronger and highly competitive wholesale
trading partners, all committed to continued investment and to working
with us more flexibly in the future to improve availability to the
readers of our magazines and deliver our customers’

requirements for efficiency, innovation and sales growth.”

According
to publishers’ body the PPA, the decision proves that competition
already exists in the system, as well as making life easier for
independent retailers by streamlining the magazines’

route to the
newsstand. Publishers fear supermarkets could choose to stock only a
small range of lucrative glossies, leading to the closure of niche
magazines.

That argument was backed up last week by a leaked
parliamentary report into the power of the supermarket, obtained by The
Sunday Telegraph. It revealed similar fears among MPs that not only
would a large number of magazines be axed, but that no independent
newsagents would survive beyond 2015.

PPA director of circulation
Nicola Rowe said: “The findings of the report, if proved accurate,
would seem fairly grim, but PPA remains committed to the future
livelihood of independent outlets, as this is the best way to guarantee
the future viability of smaller circulation consumer magazines.

“Regardless
of whether the findings of the report prove true or not, the current
proposals from the OFT regarding distribution arrangements would
seriously threaten independent retailers.”

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