Why I think newsagents should not stock Inside Out magazine

In my opinion, newsagents should request News Life Media and Gordon and Gotch not supply them Inside Out magazine.

For years, News Corp’s News Life Media has supplied Inside Out to Coles with a price of $6.00 while small business newsagents have a price of $8.20.

The Coles retail price is less than our cost price.

I think we need to match this disrespect by refusing to stock the title. It makes us looks expensive. That is what News and Coles want. Shame on them.

Beyond making other retailers look expensive for this magazine compared to Coles, there are other issues here that concern me, issues that I think the authorities like the ACCC need to consider.

At $6.00, Inside Out is sold at Coles supermarkets at below the established cost price for the magazine title.

The ACCC website has something to say about selling items at below cost including this:

While selling goods at a below-cost price is usually okay, it may be illegal if it is done for the purpose of eliminating or substantially damaging a competitor. This is known as predatory pricing.

Coles has been offering Inside Out magazine at $6.00, discounted from $8.20, at least since June 2014 when I first wrote about it on this blog.

The ACCC has something to say about two-price comparison advertising including this:

Statements such as ‘Was $150/Now $100’ or ‘$150 Now $100’ are likely to be misleading if products have not been sold at the specified ‘before’ or ‘strike through’ prices in a reasonable period immediately before the sale commences.

Such statements are also likely to be misleading if only a limited proportion of a product’s sales were at the higher price in the period immediately before the sale commences. The volume or proportion of sales that may result in such statements being misleading will depend on the circumstances of each case.

The length of the period will depend on factors such as:

• the type of product or market involved
• the usual frequency of price changes.

If a business has a policy or practice of discounting goods when not on sale and uses two-price advertising in relation to sale periods, there is a significant risk that the use of two-price advertising will involve conduct that is misleading. The business would be representing to consumers that they will make a particular saving if they purchase the item during the sale period, when this is not necessarily the case.

While I am no lawyer, I think it is possible that the Coles Inside Out magazine pitch is what the ACCC would consider to be misleading conduct based on its position on two-price advertising.

I wrote to the ACCC seeking their consideration of evidence Coles has been running this campaign for two an half years. They expressed no interest.

The only option I see is to get attention of News by refusing to stock this title and maybe other titles. A commercial strike if you will.

UPDATE: 13:49 28/06/2018: This good news from the National Sales Manager at Bauer Media:

Hi Mark,

I saw an article today in Media Week regarding the disparity in price positioning of Inside Out magazine between Coles and Newsagents and calling for a boycott of the title.  I am pleased to inform you that Bauer Media are now the publisher of Inside Out magazine, along with Country Style, having purchased these mastheads from News Life Media this month.   As part of the title transition process we have informed Coles that we will be reverting the masthead to a national price parity point of $8.20.  This will be effective from the August issue.

It continues to be important to  Bauer to support the newsagent channel by maintaining competitive balance in the market place.

I trust this email finds you well.  Please let me know if you have any questions.

Regards,

 

Julie