How to blackmail a newsagent

A newsagent colleague contacted me Monday this week to advise they had not received magazines from a distributor. Investigation revealed they had been put on stop because they short paid their account the previous month by $500, an amount close to (but below) the value of returns supplied which the distributor had not credited.

Rather than work through the problem, the distributor, without consultation or discussion, cut magazine supply to the newsagent. This attack on the cash-flow of this small business by the magazine distributor is, in my view, an abuse of power.

It is unreasonable in my view, over a $500 accounting dispute, several days after the dispute was raised, to cut supply to the small business newsagent. This newsagent has an eight-year good payment record, where is the respect for this relationship?

The distributor, later in the week, agreed to credit the $500 – after the newsagent paid it. However, they then demanded the latest account be settled two weeks early – all because the newsagent was chasing a credit for returns supplied. While the returns form may have been sent to the wrong address, there is no dispute that the returns were received on time.

What recourse does the newsagent have except to short pay the bill when a credit has not been provided as it should have? None. The distributor, on the other hand, is extremely powerful since they can cripple the newsagency, as they sought to do in this instance. What they did to this small business was blackmail.

No wonder some newsagents are leaving the channel and others are seeking professional help for depression and other mental illnesses. With bullying tactics like I have seen this week by this distributor I find myself questioning whether newsagents will ever achieve equity in their relationships with magazine distributors.

I approached the distributor at the request of the newsagent to try and get the issue resolved. The distributor refused discuss it with me. I take this as their preference to deal with a weaker party. It is appalling behaviour. I had the newsagent’s permission yet the distributor went to ground. My view is they did this because they knew they had no defence for their appalling behaviour.

The sad thing is that you won’t read about this appalling abuse of a small business by a big business in the press. Media companies protect each other. The blackmail experienced by the newsagent at the heart of this issue this week ought to be the subject of media scrutiny. Shows like A Current Affair investigate far lesser issues.

The newsagent involved is planning to complain to the ACCC. While I support and encourage this, I see it as a waste of time. The ACCC has demonstrated it cares little for the plight of newsagents at the hands of magazine distributors.

The story I have recounted here is not the only one of its type this week. I would estimate that there around 150 newsagents on stop over accounting ‘issues’ at any one time. I’d estimate that around half are due to unfair treatment by the distributor involved.

Events like this are disheartening for newsagents. They demonstrate the inadequacy of the regulation of the Trade Practices Act. They also demonstrate the disregard this major supplier has for newsagents.

A sad week for all I’d say.