Newsagents body calls for print distribution investigation

The body representing independent newsagents across the country has issued a new call for a Competition Commission investigation into newspaper and magazine distribution.

Menzies Distribution: one of the major wholesale print distributors in the UK
Menzies Distribution: one of the major wholesale print distributors in the UK

The National Federation of Retail Newsagents (NFRN) is demanding a referral of the news and magazines industry to the Competition Commission for a full market investigation.

In September 2009, the Office of Fair Trading declined to make a market investigation referral to the Competition Commission, following a lengthy review of the sector.

However, it said it would "not give the sector a clean bill of health" and that after a period of two years, it would consider whether to make a short update review of the sector.

The NFRN has today (25 July) launched a "Press For Reform" campaign, asking its 18,000 members to sign a petition against "current abuses by publishers and wholesalers", in the hope that it can bring about such a review.

The NFRN said the situation had become worse for its members since the publication of the 2009 review, and that publishers forced "uneconomic contacts" on distributors who then looked to recoup from newsagents.

The organisation said the two dominant players in the wholesale market – Smiths News and Menzies Distribution – also squeezed members by effectively operating regional monopolies, leaving retailers with no choice of where to buy their products.

Margins for newsagents had been particularly tight in recent weeks, the NFRN said, following the demise of the News of The World and the drop in the cover price of the Sunday Express to £1.

Kieran McDonnell, president of the NFRN, said: "The unethical way in which publishers and news wholesalers abuse their power in this industry to exploit retailers has gone too far and retailers have had enough.

"That’s why we are launching our Press for Reform campaign and we will be doing everything we can to urge politicians and the competition authorities to refer the actions of newspaper publishers and wholesalers to the Competition Commission for a full market investigation."

The OFT said it would wait for likely submissions before considering the matter.

A spokeswoman said: "The work that we do is determined by the likely impact on consumers, but we are happy to listen to industry views. We'll consider any submissions that are made to us."

Mike Newman, chairman of the Newspaper Publisher Association’s circulation executive, said his organisation would not support the idea of a referral to the Competition Commission, claiming the arguments put forward by the NFRN "carried little weight".

"Those in the publishing and wholesale industries would argue that very little has changed in the last two years," he said.

Despite some changes since 2009 - including the closure of the News of The World and the collapse of the third biggest distribution firm - there had been no complaint from the general public about lack of availability and the overall number of newsagents nationally was broadly similar, Newman added.

David McIntosh, managing director of Menzies Distribution, said: "We work hard to meet the demands of publishers, while at the same time serving the needs of retailers of all sizes, up and down the country.

"We are very happy to continue working with all supply chain partners, including the NFRN, and with the OFT."

Smiths News has not responded to a request for comment.

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