News Limited has announced changes in accounting processes for handling supply of their newspapers to Foodland and IGA outlets. Newsagents will no longer invoice Foodland and IGA for newspapers, News will do this direct.
The announcement says that there will be no change to newsagent commission arrangements and that the current settlement discount, something which I understand to the South Australian specific, will remain in place for the duration of the current agreement.
While the announcement from News appears to be fairly straightforward, it has naturally unsettled newsagents who are waiting to hear from News about the future of newspaper home delivery, not just in South Australia but nationally. Some newsagents expect n News to abandon home delivery while others expect a new contract offer. Until there is certainty newsagents, distribution and retail, will remain concerned for their future involvement with newspapers.
Given the uncertainty which is challenging sales of businesses, capital investment and other moves, I would have preferred News to not make any changes until they tell newsagents what their future in home delivery looks like. That said, I appreciate that they will have their commercial reasons for acting now.
While I am not aware of any differences in the South Australian and Victorian networks, I like these deals.
They reduce administration, risk of bad debts, and debtors, as well as improve cashflow.
I hope that HWT and Fairfax make more of these deals.
ps. Does anyone know when the HWT review will be announced? We have the opportunity to grow our territory and profit by 20% but refuse to spend the money unless we know what is going on.
Dean, what you say is true but you do lose all control over supply. News Ltd did this with Woolies petrol outlets here in NSW and we as the newsagent are left to process a boot full of returns every week. Their supply never gets adjusted as ours seems to every week.
Shayne,
We have 13 sub-agents on direct supply with HWT, 5 of whom also have direct supply with Fairfax.
While I acknowledge the oversupplies that result, you can elect with HWT to take back control of supply and reduce this problem.