Newspaper publisher hits small business

Newsagents have been split into two classes by the folks at The Age. Retail newsagents are paid a commission as a percentage of the cover price. Home delivery newsagents, the people who get up in the middle of the night to manage the delivery of newspapers to homes by 6am are no longer paid based on the cover price.

The Age has unilaterally decided to compensate home delivery newsagents based on a fee they decide. While they previously controlled the delivery fee, newsagents could rely on benefiting at least from cover price increases. Now that has been taken away.

VANA, the association representing newsagents, has effectively endorsed the change in compensation arrangements from The Age. They did this by writing to newsagents at the same time as The Age. VANA should have left this issue alone and let The Age muck this up for themselves.

With fuel, labour and other costs rising, it is unconscionable in my view that a rich company like Fairfax, publisher of The Age, stops newsagents from charging a fee which at least covers their costs. This latest move protects the Fairfax subscription base asset and does not help home delivery newsagents achieve fair compensation for what is a world class service.

I am okay because I sold my home delivery run in late 2006. Newsagents trying to sell now will, in my view, get less because of the new fee structure implemented by The Age – they have certainly made home delivery runs less valuable than they were two months ago, something I suspect VANA has not seen yet.

If I were Fairfax I would increase compensation to newsagents because they more they make the happier they will be and the more they will work to increase sales. Treating them as cheap labour will come back and hurt the company in the long run.