The trade body representing UK newsagents has told The Guardian that retailers will switch support to rival titles following its decision to cut their share of the cover price.
It comes after last week’s warning from the National Federation of Retail Newsagents (NFRN) that the broadsheet faced a ‘militant’backlash from newsagents after cutting its weekday margin for newsagents from 25 to 24 per cent.
The NFRN claimed Guardian Media Group‘s chief executive Andrew Miller yesterday rejected its calls to reconsider the cut, but said it still wanted both organisations to work on ‘joint commercial activities”.
NFRN chief executive Paul Baxter said he was ‘dumbfounded’by The Guardian’s decision. ‘Ever since this percentage margin cut was imposed, my phone has been red hot with irate members demanding that the NFRN organise a day of action against the Guardian,” he said.
‘This was very evident at a recent meeting in London when over 200 members vented their anger. Whilst my legal team tell me that collective action is not something that the law allows us to do, I can well understand the anger and frustration of our members, who see their livelihoods progressively disappearing down the pan as a result of uncaring and irresponsible publishers who want to control prices and margins, but seem to think that it is only them that experience increasing costs.”
Baxter claimed The Guardian’s percentage cut had ‘lit a fire that publishers may find hard to extinguish”, adding: ‘As a consequence of that, the likelihood is that the Guardian may see scant reward from its cover price increase as retailers switch their support to those titles that have remained loyal to them.”
Retailers claim they will lose 1.2p on every copy of The Guardian they sell and that collectively the industry could lose around £250,000 a year because of the move.
But a spokesperson for The Guardian said: “Guardian News & Media’s terms still compare very favourably to those available from the rest of the quality daily market. Retailers will now receive an additional 3.8p per copy of the Guardian sold during the week, up from 25p to 28.8p.
“This margin is substantially higher than others in our market, with the nearest being 25p from the Times.”
Baxter said the timing of the margin cut, shortly before the Office of Fair Trading (OFT) is to consider whether to conduct another review of the news industry, was ‘extraordinary”.
He continued: ‘As one of the areas identified by the OFT as likely to prevent, restrict or distort competition was publishers fixing and printing cover prices, perhaps we should be saying ‘thank you’ to the Guardian for helping us to demonstrate why intervention from the competition authorities is now urgently needed”.
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