LAST WEEK THE
Office of Fair Trading delayed its longawaited decision on magazine
distribution, amid speculation that it may be considering a compromise
solution.
The OFT had been due to deliver its final ruling 14
days ago on whether to force publishers to drop existing distribution
deals that give wholesalers exclusive rights to deliver magazines in a
certain region. But it pulled out at the last minute without giving any
explanation.
The reason probably centres on the departure last
week of outgoing chairman Sir John Vickers. His job has been split and
he has been replaced by John Fingleton as chief executive and Philip
Collins as chairman. It is from these men we can expect a decision next
week, if indeed one hasn’t been announced while Press Gazette went to
print.
“This can only bode well for the decision,” said an
industry source last week. “We have to assume that Philip Collins
doesn’t just want to rubber-stamp the decision and actually wants to
take a proper look at the evidence. He may be looking at proposing some
sort of compromise, because if he doesn’t, not only will the industry
lobby him to reconsider, but it will hardly be the most auspicious of
beginnings.”
Related
For the past nine months the magazine industry has
been fighting a long, arduous and possibly losing battle against the
OFT. The body has decided to change the way in which magazines are
distributed, thus endangering the livelihoods of thousands of men and
women in the publishing and retail business. Why? Well that remains a very good question.
Magazines
and newspapers are currently distributed by three large wholesalers –
John Menzies, WH Smith and Dawson News – which have long-standing
exclusive rights.
In return for this exclusivity, they guarantee
comprehensive delivery to retailers, regardless of their importance or
size. But because this has been construed as somehow contravening
European competition legislation, the OFT has been reviewing the
arrangement. What they have decided is this: while the system can
remain in place for newspapers, it must change for magazines (like this
one, for instance).
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For the uninitiated, this may seem like an
inconsequential change, but if the OFT’s draft decision is upheld –
which is what we expected it to be last week – not only could up to
1,200 independent corner newsagents be forced out of business, but
magazine publishers warn that up to 1,000 titles could close. For good.
Large retailers would carry only the best-selling titles, and the
demise of the smaller retailers would hit consumers in rural areas.
When
the OFT’s draft opinion was made public earlier this year there was an
outcry among magazine publishers, many of whom contacted the OFT with a
view to discussing their suggestions. But until very recently the OFT
refused to meet any of them.
All in all, it’s a potentially barmy decision, and one can only hope that this delay bodes well for a volte-face.
Michael
Heseltine, former deputy prime minister and chairman of Haymarket
Publishing, has been one of the most vocal opponents of the OFT
proposal, and has convened various meetings between them and concerned
industry bodies. He has lobbied long and hard, but just a few weeks ago
even he was beginning to wilt. “There is an immense feeling of
depression within the industry,” he said. “The secretary of state needs
to take the decision and the responsibility.”
But of course
that’s exactly what he hasn’t done. So far the British Society of
Magazine Editors, the organisation which I chair, has been to Number 10
twice; once to try and encourage the Prime Minister to hear our case
and once to brief the PM’s team. The Government hasn’t been keen on
helping; in fact we got the impression that they felt themselves
powerless to stop the OFT doing anything, and that if they dared to
intervene, then the OFT would simply dig its heels in.
We were
told the hands of the Downing Street team were tied and that they would
need hard facts before they could think about suggesting to the OFT
that it might want to look at this again. When we presented those hard
facts we were met with blank faces.
In The Spectator last week Heseltine underscored the problem: “The Office of Fair Trading is now its own creature.
Ministers
have washed their proverbial hands; quangocrats rule. When I was there,
DTI officials wanted to submit the ailing Observer to this time- and
business-consuming machinery [the same one effecting the magazine and
newspaper distribution process]. I refused and allowed its sale to
proceed.
I knew what delay could have done to an important organ of public opinion. But in those days ministers were ministers.”
Last
week even The Times weighed in, saying that the OFT’s distinction
between weekly newspapers and magazines was illogical and potentially
open to judicial challenge. In reference to the changes at the head of
the OFT, its editorial concluded: “Backing down is rarely fun, but it
is easier for new regimes to stomach than old.”
Let’s hope Philip
Collins and John Fingleton have strong stomachs. Otherwise the magazine
industry will suffer irreparable damage.
Dylan Jones is the editor of GQ
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