Several newsagents have contacted me today saying that there are reports in NSW newspapers saying that the NSW Government has announced that 7_Eleven is to trial selling lottery products. If this is true it is the actions of a government which cares little for small business and does not understand the fine balance of traffic to newsagencies. If this reported trial proceeds to full roll-out newsagencies will close as a result. Newsagents need to contact Grant McBride, the Minister for Gaming and Racing on mindgr@dgr.nsw.gov.au.
Mark, I’ve read your blog with some interest over the past few weeks, but I’m starting to notice a trend in your posts – the need for a protection policy for newsagents against competition.
Why should such a thing be afforded to Newsagents? The lottery thing is a classic case in point – for how long have newsagents had a monopoly over the retail sales of lottery products? All the government is trying to do is to increase the number of agencies that their product is available at and you’ve put up no further argument then for the protectionism of Newsagents.
The newsagency as we know it now will not survive into the future, movement to electronic publication and distribution and the ability to buy products like cards etc for significantly cheaper prices elsewhere is going to start to significantly hurt the newsagency, however protectionism isnt the answer.
Thomas,
I’m not calling for protection. At least I don’t think I am. Newsagents do not have a monopoly over lotteries. Sure, they are the majority of the outlets but it’s not a monopoly.
My question is more one of why are more outlets needed? Are consumers unsatisfied?
Also, an average newsagency is a fine balance of traffic generated by lotteries, newspapers, magazines and greeting cards. Play with any of these and you put newsagencies at risk. That’s okay as long ad government and others understand the consequences. Newsagents do play an important and unique social role in the community.
Newsagents have many competitors but have been left with (courtesy of the government and suppliers) supply arrangements which deny them the opportunity to compete fairly. For example, deregulation in 1999 led to magazines being sole in many new outlets yet only newsagents carry titles outside the top 100 – titles which are loss making. Contractual and supply arrangements are such that newsagents are unable to negotiate fair terms so they either stop being a newsagent or accept the losses as part of their lot. A fair market system would have left newsagents with an easier ability to choose the titles they carry.
No, I am not calling for more competition. Just more research into the implications of decisions being made.
Mark
Mark,
As an outsider, its obviously difficult to comprehend the nuiances of running a newsagency, however as a consumer I’m looking to save money or time or both. By offering Lotteries services in 7-11 for instance, increases the number of agencies (especially within Sydney, where 7-11 is primarly).
From the outside, based on what you have written previously – you should be targetting MP’s who have a small business slant (there are a few of them too) with your issues regarding magazine distribution rather then this. The NSW government is interested in lining their pockets with any additional revenue through the lotteries they can get by increasing the agency numbers.
Thomas,
Newsagents have targeted MPs with no success for decades. Farmers, auto makers and companies going broke do better from the politicians. That’s okay – if the government is happy to lose newsagents from the landscape. I appreciate that sounds emotive. The issue is emotive.
Australian Newsagents offer the most competitive newspaper and magazine distribution system in the world. We have given lotteries the best real estate for a commission of 6% of turnover or less. To have more competing for a piece of the pie yet to have to continue to give over the best real-estate in our shops creates an unfair situation.
7-eleven wanted magazines. They got them – and only chose 10 or 15 titles. Good luck to them. We were not smart enough at the time (or those representing newsagents at least) to negotiate better terms for the titles we are forced to carry. Frankly we have ourselves to blame. And now, in this ear of even tougher competition, we still can’t organise ourselves enough to do anything other than make noise.
I’m rambling and I apologise for that. My core thesis is that all stakeholders in the newsagency channel – governments, newsagents, lotteries commissions and companies, publishers and distributors – they all ought to take a look at the channel and decide if deregulation has been fair and delivered the best outcomes to considers. I suspect that in many communities it has not.
mark