OFT may relax press distribution rules

LONDON - The Office of Fair Trading has announced it does not plan to refer the newspaper and magazine distribution sector to the Competition Commission and that it could relax rules governing wholesalers.

OFT may relax press distribution rules
OFT may relax press distribution rules

The OFT said that, although certain features of the sector "meet the statutory test for reference [to the Competition Commission] in this important sector", it does not intend to refer it for further investigation.

A key reason behind this proposal, the OFT said, is the positive market developments that could come about from distributors self-regulating.

As part of a wide-ranging review of the distribution sector, the OFT today released three publications, including guidance that the current distribution arrangements for newspapers, unlike magazines, may benefit from exemption from competition law.

In addition, it is proposing that wholesalers are released from the undertakings underpinning the National Newspapers Code of Practice. The code was introduced in 1994 following concerns that wholesalers were refusing to supply new retail outlets if they considered an area was already adequately served. To address these concerns, the code requires wholesalers to supply all new retailers who agreed to minimum weekly purchases of newspapers.

The OFT said its review has found changes in the market since the code was introduced, and as a result the OFT considers that greater commercial incentives to supply new retail outlets now exist.

Its review across magazine and newspaper distribution comes as the Retail Federation of Retail Newsagents seeks clarification on the current rules governing the newspaper and magazine distribution sector.

John Fingleton, OFT chief executive said: "Being able to get newspapers and magazines where and when they want them, at keenly competitive prices, matters hugely to consumers.

"The OFT has brought together three strands of work which reflect the most detailed and thorough analysis of the sector done in recent years. We are recommending a release from regulatory restrictions, while the industry should now take a close look at its own arrangements. We hope that once it has done this, our work in this important sector will enable competition to deliver even better outcomes."

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