The imposition of an 80 cent per copy surcharge on newspapers delivered to newsagents in certain areas continues to stress the affected newsagents and leave plenty of others quietly wondering why they dodged this bullet.
News Limited has not imposed the delivery surcharge in all regions where it could apply, leading to questions about the motivation of this move. It has also not so far adjusted the cover price printed on the newspaper.
Coles and Woolworths have not so far imposed the 80 cent a copy surcharge. This is already hurting retail newsagents as newsagency shoppers change outlets. Here’s what else has happened in the last few days:
- Two country newsagents have lost up to three quarters of their paper customers.
- A delivery round has lost over 100 plus customers and they are receiving cancellations daily.
- One newsagent who is retail only has cut his paper supply by half.
- Every corner deli is losing paper sales and early morning customers and most have indicated that if this trend continues they will have to put off a staff member.
- Delivery drivers will soon have to be put off as the trend of paper losses continues.
- There are many businesses affected by News Ltd’s decision.
Questions put to News Limited remain unanswered. Newsagents feel treated poorly.
It will be some time before we understand the real game being played here. So far, based on the evidence, this appears to be a move that will harm newsagents unreasonably. There is no other explanation for the approach News appears to be taking and the lack of consistency in pursuing a more economically viable approach to distributing their product in all areas of Australia.
From what we can see at the moment, a small group of South Australian newsagents are being treated unfairly.
Maybe News is experimenting on doing with out Home Deliveries and Newsagents. i.e. seeing what would happen if they made the changes they have and if people can be convinced to buy their paper daily like milk (which was once delivered).
This is just driving customers to Coles and Woolies. What has this done to circulation and distribution costs. It is despicable treatment of the Newsagents concerned.
Peter I share this concern and others I have expressed. News will dismiss such concerns as conspiracy theories. No matter how they are labelled, these are concerns we need to confront and explore.
I feel for the newsagents in SA. I have more on what they are going through that I could write but I will not for the moment. They are doing it tough.
Are you saying that in the same town Woolies & Coles are paying 80c less than the newsagent for the same product? Or is it not that clear cut?
Is it possible that this is like the milk and petrol station price cutting where Coles & BigW are deliberately not passing on the charge. They can afford to carry the loss to gain newsagents customers and force more families out of business.
What we know us that they are not charging it. We don’t know if they are being charged. Either way, the ACCC ought to be interested.
So a newsagent would be better off buying their papers from woollies ? 80 cents profit straight away
Mark you seem to have boundless faith in the ACCC. The only time I have seen the ACCC act is in reaction to politicians ex or current. The ACCC will not care unless a political instruction is given.
Have to believe / hope.
We came to the realisation some time ago that there are two types of business, “price makers” and “price takers”. The reality is that the newsagent channel are price takers. We have no control over our core business, magazines, newspapers and lotto.
We purchased our newsagency four years ago and had always battled with containing costs so we could make a profit from this part of the business.
When the T20 was released last August we made the decision that we didn’t want to be a price taker any more and handed back our run. T20 had the sole purpose of reducing costs for News Ltd. We could see nothing but heart ache down the track for the newsagent.
This has turned out to be a pivotal decision for the business. We now focus our energy on price making activities such as gifts, niche stationery and printer cartridges. Our margins are set by us to customer demand, not by a third party supplier.
Mark, this is a great Blog for newsagents to vent, be informed, and learn.
Unfortunately, it appears to me that you fail to realise the position of power you have as a director of both a highly successful software company and news agency buying group.
Newsagents look to you (whether you like it or not) as a leader, and sometimes they need your guidance and support.
I think this topic is one where a leader such as yourself needs to act….demand answers from News Ltd about why Coles and Woollies are not passing on the surcharge. Approach the ACCC on behalf of agents affected.
You have sat on the fence during T20, but now S.A agents need leadership and a voice. If News Ltd get away with doing this in S.A, they will roll it out wherever they wish.
…….the sooner we stop calling these “!@#$” industry partners the better. Just think what is going to happen in Victoria when the pricks have all our customer details at their finger tips………
Amanda, I have not sat on the fence through T2020. Indeed, for years I have called on newsagents to quit newspaper distribution as there is no upside.
Yes, I believed the News Lines last year on T2020. Time has shown them to be just that, lines.
On the SA issue, the ACCC does not recognise me and will not engage with me. I have been assisting the affected newsagents where I can.
Coles has now started applying the surcharge.
Mark. A spelling error in your last comment. Coles have now come on board with the surcharge
Amanda from watching Mark he does what he thinks is right and becomes involved as much as the law lets him. He is also showing leadership with this blog.
We are no longer allowed under the Law to act as a collective unless special permission is obtained. My understanding even if the right to bargain collectively is given it is still the suppliers choice to bargain with the individuals or the collective as they see fit.
This puts our associations in a hard place as they do not have the collective power to bargain for us. If a supplier does not like a Newsagents Association they will not deal with it or may be ban people they do not like from that association from dealing with them. In a lot of ways our associations are toothless tigers.
The only power that is seen as acceptable is Market Forces / Market Power / Market share which to me is different sides of the one coin. The system we have in place suits the big boys in keeping the little boys down and under control.
I will have to agree with Peter on this one. The newsagency channel is extremely fragmented. We have little, perhaps no, leadership (I can’t even get an email response from four days ago). We are at the mercy of large organisations that have own agendas.
Mark is probably the only shining light we have at the moment. I don’t think he should be expected to take the place of those “toothless tigers” that represent our interests. He should be left to do what he does best. To provide vision and good editorial comment.
In essence we need someone else to rise from the ashes, to unite and lead us.
frustration I have is that newsagents want someone to fix things for them whereas processes available for doing this usually require complaints from the aggrieved parties. This is what the ACCC has said to me and it’s what I have shared here about magazine supply problems. Every complaint of systemic oversupply (backed by evidence) that is not raised with them is a missed opportunity.
I am planning a post where I outline the process, again.
Mark are you aware of this coming to the eastern states?
Keith I am not aware. That said, the cost pressures News says caused this in SA do exist elsewhere including the Eastern Seaboard.