The UK National Federation of Retail Newsagents this week made an unexpected formal application to Office of Fair Trading (OFT) for a full review of the newspaper and magazine supply chain. The newspaper and magazine supply model has been subject to OFT consideration over the last two years with OFT positions being advisory. The review sought by newsagents, if granted, could result in changes being imposed on the channel by the OFT.
The distribution of newspapers and magazines in Australia was deregulated by the Federal Government in 1999. No review on the impact of this deregulation has been conducted. Many newsagents contend that deregulation has seen them severely disadvantaged in that new competitors to newsagents get to choose the magazines they stock and only take the top 50 or so titles – leaving newsagents, who have little control over what they stock, to carry more than 2,000 less-popular titles which account for less than 25% of retail sales.
Given the Federal Government’s involvement in driving the deregulation in 1999 I would have thought that a Productivity Commission Inquiry would be an appropriate forum in which to assess the impact on the community, small business newsagents and small publishers of the government policy change.