A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Author: Mark Fletcher

Trade Practices Act mandated mediation ignored in dispute between Supanews and franchisee

I met last week with Rad Williams, the franchisee of Supanews Bayside (Frankston). Rad is a client of Tower Systems, my software company and has been locked out of his business by Supanews, they hold the head lease, since December 21. On hearing of the situation I offered to help – hence my meeting with Rad last week.

Because of threats of legal action by Supanews against Rad I don’t plan to go into detail about his situation here. I’ll share the basic facts. The Franchisor (Supanews) and the Franchisee (Rad and partners) have been in dispute for some time. It is while this dispute was taking its course that Rad was locked out of his business. This has stopped him earning an income at the most crucial retail time of the year. I has also denied him access to personal items and assets. Due to the time of the year, timely access to legal advice has been a challenge. As of last Friday the shop had been closed eight days.

Newsagents ought to be concerned about this for any newsagent in trouble is felt by the entire network. Rad’s situation impacts how suppliers view newsagents. It also impacts how prospective purchasers view newsagencies. Without judging the actions of Supanews, December 21 is a dark day for our channel.

One particular aspect of the lockout which is surprising is the use of the Frankston Police by Supanews. From what I understand, without any court order, they attended and advised Rad that he would be arrested if he attempted to access his business.

The ACCC website provides advice all franchisees ought to consider if they are in dispute with a franchisor. It documents mediation required (under the Trade Practices Act) to resolve disputes which cannot be resolved amicably:

If direct internal negotiations fail to achieve a satisfactory outcome within three weeks, the code enables mediation—negotiation between the parties facilitated by an impartial third party, the mediator. Under the code, if mediation is requested by either of the parties it becomes mandatory for both attend the mediation and to try to resolve the dispute. Refusal to attend the mediation and/or make a genuine attempt to resolve the dispute will constitute a breach of the code and thereby a breach of the Act.

This mediation guarantees an independent forum before the dispute gets to court.

Here are some links which readers may find helpful:

ACCC Office of the Mediation Advisor (Franchising).
ACCC small business complaints form.
Small Business Commissioner, Victoria.
Franchise council of Australia.

1 likes
Newsagency challenges

Another magazine which ought to close

DSC02346.JPGMarketing magazine and this sister publication are more titles which ought to be euthanised or be subsidised in the retail channel. This $17.00 guide sits for a few months, sells nothing and is returned. All the while my cash is gone, my labour is used and my real-estate is wasted.

The magazine distributor wins as they are paid for everything they do. The publisher wins because their masthead is in front of eyeballs. Advertisers win because their ads are browsed. Newsagents are the only losers and too many of us are too ignorant and or too tired to understand.

0 likes
magazines

MLM magazine has passed its use by date

mlm2.JPGMLM magazine is the second title I have in my sights for 2007. MLM sales are appalling. It costs me around $50.00 a year in labour and real-estate for no return. That I continue receive stock when I sell 1 or non each issue represents unconscionable conduct on the part of the distributor.

Newsagents ought to consider boycotting MLM and making their anger at such poor performance felt.

The longer newsagents provide free access to their shelves and labour the longer titles like MLM will drain cash and energy from our businesses. Euthanasia is the only solution.

0 likes
magazines

Deregulation for Australia Post?

The European Union has called for postal monopolies in member countries to end by 2009. Some countries like France are resisting the move. Others like the Netherlands are happy. The Consumer Postal Council offers a good overview.

Since the Australian Federal Government relentlessly pursues best practice in terms of deregulation, what are their plans for Australia Post? Will the Government go the way of Europe and completely deregulate all postal services?

Currently, Australia Post is protected by its mail service exclusivity. While, through its Government owned outlets, it is busily taking retail sales from small businesses like newsagents it refuses to make postage stamps and other products and services available to those same newsagents on an equitable basis.

Complete deregulation along the lines of the European model would address the current unfair arrangements.

0 likes
Australia Post

Newsagent anger grows over Bill Express BOPO card training

20/01/07 UPDATE. The concern expressed below has been well addressed by Bill Express announcing a sales game for newsagents. More here

bopo2.JPGThings have deteriorated in the two weeks since my Dec. 16 post about newsagents being ‘charged’ for training by Bill Express (ASX code: BXP) in the sale of its new BOPO debit card.

Newsagents are reporting being charged even where no training has been provided. Others have refused the training and still been charged. Many who have received training are reporting that it took a few minutes and they were still charged upwards of $200.00 including GST.

It is rare that a supplier keen to win new business would force training on their retail network. However, the arrangements between Bill Express and newsagents are such that this can happen. Bill Express is reducing a subsidy for one month to ‘charge’ for the training. The subsidy was put in place in 2003/04 to financially support newsagents while Bill Express brought billers on board. As the biller traffic has not been as great as expected, the subsidy has been maintained. Without it newsagents, would be losing money and this would create further problems for Bill Express.

Newsagent anger at having to pay for training is at a serious stage. Some are openly calling for class action to be taken against Bill Express.

From what I can see there is no correlation between the actual ‘charge’ and the cost of the training. This makes me doubt the justification for the charge. I am suspicious that this is more about Bill Express’ cashflow than training. Why else would they charge a business $200 for something which is easily handled over the phone in a few minutes?

Unless the situation is resolved in the next few days, Bill Express will have done irreparable damage to its relationship with many newsagents. The only reasonable solution now is the immediate reversal of the training ‘charge’. This will demonstrate good faith to newsagents and stop them from quitting their Bill Express contracts.

0 likes
Bill Express

Strange but true: newsagency closes to remodel

balaclava.JPG

From the other side of the street it looked as if a Balaclava newsagency ended the year by closing. I go past it every day on the way to get the best coffee in Melbourne (Gattica) and noticed this morning that the window was covered over with old newspapers. My assumption was wrong. The sign on the door advises that they have closed for a week to remodel. Newsagencies never close to remodel given the daily nature of their products so the move is odd.

While I will reserve my judgment on the value of the closure once I see what they open with, the result will have to be stunning given they have a bigger and better located competitor 150 metres away.

1 likes
Newsagency challenges

A call to boycott underperforming magazines

small_business.JPGHere is proof of how newsagents are disadvantaged by the broken magazine distribution system.

On October 11, 2006 we received 16 copies of PC World’s Small Business Technology magazine at my newsagency. Up to yesterday we sold two copies. If we do what NDD, the distributor, wants, we’ll hold the title for another month. The credit for returned copies will not reach us until a month after that, leaving us more than $100 out of pocket for several months. On top of this cash-flow ‘loss’ I’d add that the title, over its shelf life, will have cost us $14.00 in real estate and labour providing a trading loss to us, on the basis of two copies sold, $9.00.

I didn’t order this title and it’s cost me $9.00. How nuts is a magazine distribution system which can cause a loss for me and not offer me any control over the loss?

How unfair is a magazine distribution system which does not value, at all, my real estate and my labour?

Every day in newsagencies across Australia we’re seeing unconscionable conduct such as with Small Business Technology magazine by magazine publishers and distributors.

I did not order this magazine. I had no input into the quantity supplied. Sales data at NDD would suggest that a scale out of no more than six copies for my store would be appropriate. However, since NDD has a contract with the publisher which, I suspect, requires scale out of all copies supplied by the publisher, they shift their obligation to newsagents like me. This makes us the banker for several months. NDD uses our cash to fund a broken magazine distribution system. The publisher gets paid, NDD is financially protected and newsagents carry the risk.

This magazine should never have been published. The information is out of date. It’s mainly advertising designed for browsing and newsagents provide this service.

I doubt that newsagent competitors in the magazine category – supermarkets, petrol outlets, convenience stores – have this title. They control what they receive. Newsagents do not.

Titles like this and scale our decisions such as that made by NDD for this title are killing newsagencies. This is one outcome of the Government driven deregulation of our channel – that we have been left with a magazine distribution model which makes us financially uncompetitive.

The only action I can take is to return the title early but that’s time consuming of itself and often leads to arguments with the distributor.

The magazine supply problem will get worse for newsagents in 2007 as the gulf between the successful titles (around 250) and the unsuccessful titles (about 2,000) widens. Newsagents must organise and take collective action, they must boycott under performing titles. They must refuse to pay for under performing stock and force their suppliers to fix the problem.

0 likes
magazines

Summer of porn

Just when I thought porn magazines had had their day sales have bounced back in the last two months. Well, soft porn at least. It’s surprising to see sales of adult magazines in newsagencies 10% to 25% up on last year. Not in all stores I have looked but enough to surprise me. I really thought the category was all but dead.

0 likes
magazines

Unseasonal, and great, year end

We’ve had an amazing three days trade Dec. 26 through Dec. 28. All departments are showing excellent growth over last year but none more so that lotteries. Our sales are up 109% on last year. There is no major difference as there was a superdraw last year as well. Our sales were already good so the 109% increase is fantastic. In the magazine department, over the same three days, Women’s Weeklies are up 27%; Sport up 67% (on the back of Shane Warne coverage); Men’s Titles up 43%; Crafts up 50%; Computers up 47% and Children’s up 79%. Motor titles are down 10% and Buying and Selling down 71%. Newspapers are down 8% in the same period.

We’re putting the growth down to people not going away this year in the numbers of last year. Of course it would be great if the growth is sustained through the year – we’ll have to wait to see if that is the case.

0 likes
Newsagency challenges

Australia Post closed today, upsets customers

Government owned Post Offices are closed today. Customers at Forest Hill this morning were angry and came into our newsagency venting. The closure is odd given Australia Post’s community service obligation; requirement to operate on a commercial basis and that it justifies the sale of stuffed bears, calendars, greeting cards and the like on the need to subsidise its mail service. Maybe if it opened on usual commercial days it could better cover its costs.

ap_closed.JPG

The closure today is proof of benefits Australia Post it receives through Government ownership. They access trading and lease terms unavailable to small business. They abuse their customers by closing on a regular trading day. They hurt small businesses around them by turning off traffic.

If other businesses had full access to the Australia Post exclusive range, Australia Post would not close today.

0 likes
Australia Post

Magazines fight for real-estate

MAGS_HEADER.JPGIt’s frustrating when publishers expect you to use header cards like this for New Scientist to promote their title. We either have to relocate the title to the top of the column or cover most of the title above – as shown. Real-estate is scarce and having publishers covering each other’s products up with headers only harms the category. We have established a rule in my show of NO HEADERS from publishers unless I or Ben Kay, the manager of the business, agree. Merchandisers are annoyed but, hey, it’s my business and I need to be able to make these decisions on what is best for the business.

0 likes
magazines

Lottery jackpot

While everyone is focused on the $33 million lottery jackpot this Saturday, lottery retailers ought to focus on the following week. Tuesday’s OzLotto has reached $15 million and Thursday’s Powerball has reached $12 million. These jackpots will ensure that people collecting prizes from the $33 million will reinvest – without them, we’d pay out and lost the sale opportunity. Opportunistic? Yes. It’s business and these lottery games are provide low cost nighttime dreams.

0 likes
Lotteries

Newsagent wins another round in court against publisher

The Industrial Court of NSW has ruled this afternoon that the temporary injunction granted to a newsagent last week stopping the take over of their newspaper distribution territory by a publisher is to remain in place until the parties have participated in mediation. I am told that the newsagent sought mediation with the publisher prior to today’s ruling and was rejected by the publisher. My previous posts on this matter can be found here.

Today’s ruling and those leading up to it are a blow to the publisher who was using what I’d label a vague provision in its newsagent contract to take over a business for no compensation. The contracts have been contentious since they were introduced in 1999 following the deregulation by the Federal Government of newspaper distribution in Australia.

The matter before the Industrial Court of NSW is a test case and newsagents will watch the outcome closely. It will set a benchmark as to when and how a publisher can take the newspaper distribution business from a newsagent.

The court mandated mediation will be most interesting.

0 likes
Newsagency challenges

Blogging for government small business policy change

I have sent this letter to the Federal Minister for Small Business today in response to her inadequate response on Australia Post – see my earlier post today. I’m not confident of a considered original response. Here are what I consider to be the key points in this letter:

In 1999, your Government facilitated the deregulation of newsagencies. You took away our exclusivity and allowed others to cherry pick our top selling magazines and newspapers. As a result, newsagencies like mine have been left with a supply model which is fundamentally flawed and a significantly higher customer acquisition cost. Your deregulation has left newsagents severely disadvantaged.

I agree that deregulation of the supply of newspapers and magazines was appropriate. However, since you did not put in place any review process, you do not have data to show what a mistake you made and how much you have hurt this small business channel. Good governance requires you review the impact of such significant deregulation on the 4,600 family businesses affected.

Australia Post has seized on the deregulation you brought about and now your Government is profiting from these regulatory changes.

While Ministers in the Government say it’s an Australia Post issue and that they will not meddle, I say it’s a policy problem which they created:

Australia Post is selling products which fall way outside what is permitted under the Act. Their Last minute gifts catalogue, which was released December 4, provides proof. I have enclosed a copy for your information.

Australia Post is looking more like a newsagency every day. Newsagents cannot compete because we do not have the exclusive postal product which drives people to Post Offices. Australia Post is abusing its exclusive postal products and government ownership to the detriment of small business newsagents.

These are policy matters and go to heart of the Government’s small business credentials. I urge you to act for your small business constituents and not just an enterprise the Government wholly owns.

I know I go on about Australia Post a lot in this place. These are not the ranting of a lunatic. Rather, they are valid complaints by someone who feels the impact of a flawed Government policy and can see that it will cost jobs in small businesses.

Is anyone listening?

0 likes
Australia Post

Small Business Minister fails Business 101

The Federal Minister for Small Business, Fran Bailey, has responded to my November 16 letter about Australia Post. However, calling the Minister’s letter a response is inaccurate. One of her assistants has selected an off the shelf letter which is vaguely related and sent this to me.

My letter is specifically about the 865 Government owned Post Shop outlets and that many of the products they sell are not permitted under the Act under which Australia Post operates.

Rather than deal with my letter, the Minister reminds me that 3,611 Australia Post outlets are privately owned. My letter lists non postal items being sold by the Government business in competition with businesses like mine. The Minister writes about courier and related postal services. My letter raises the issue of Australia Post using its monopoly brand to land people in its stores for far less than I or any commercial business can. The Minister is silent on this.

The response by the Minister is grossly inadequate. It is a non response. If this were a High School assignment in business letter writing I would fail the student as they have not demonstrated any understanding of the original letter. From this letter I receive no confirmation that Minister Bailey actually read my letter nor that the Government understands the nature of my complaint.

The vague nature of the letter allows for the Minister an AWB type defence: she can claim she did not read my letter; that the response was prepared by an adviser; that her letter was factual.

There is a disconnect here Ms Bailey. I am a taxpayer bringing to you a serious problem caused by a Government owned enterprise, a problem which is costing jobs in small businesses like my newsagency. My take-away from your letter is that you care more about Australia Post than my small business. Your vague disconnected response is the latest in a stream of communication from this Government .

I urge the Government to amend the Australian Postal Corporation Act 1989 to limit what Australia Post can sell through its own retail outlets and to names postal items such as envelopes and Post branded packaging materials. Such would be the action of a Government committed to small business.

0 likes
Uncategorized

Magazines the hit of Christmas sales

Magazine sales were very strong in my newsagency this Christmas – double digit growth in the three weeks to Christmas Day. The main kick was in Women’s Interest, Crossword, Special Interest and Sports titles. Looking deeper, it’s in titles where newsagents do not have a competitor. Balancing the growth was a significant fall in computer, motoring and teen magazines.

0 likes
Newsagency challenges

Distribution is king – online and offline

Distribution, Content and NOISE is part two of an excellent piece by newspaper executive and blogger Brad Robertson, Vice President of Advertising for the Des Moines Register. I like what Brad has written for several reasons: he’s a newspaper executive NOT in denial!; his views are well thought out; he’s right to say that distribution is king online and offline; his writing is a wake up call to newsagents – if only the read it.

Like newspapers, newsagents need to invest significantly in attracting online traffic. Hang on, newsagents need to build online businesses first – now there’s a challenge.

0 likes
Newsagency challenges

Newsagents miss a lottery opportunity and put the network at risk

Last night’s OzLotto prize was a $13 million jackpot and such a jackpot usually means a sales kick of between 10% and 20%. Yesterday, I drove past many newsagent Tattersalls outlets which were closed. While this was good for outlets like mine in shopping centres, it sends the wrong message to Tattersalls. Newsagents, in lotteries, have a great traffic generator. We know from press reports last week that there is talk of supermarkets getting in on the action more. We cannot afford to demonstrate poor service. Those stores closed yesterday sent the wrong message to Tattersalls and to Government, they gave them a reason to think we’re not serious about gambling product. Hard as it is to open Boxing Day, the $13 million jackpot should have seen every store open and actively promoting the dream.

If we lose some or all of the gambling product we have today, in part we will have ourselves to blame.

Thanks to others being closed and o our marketing our Tattersalls sales were up 200%. While that makes me happy, that many in the network were closed is a huge disappointment.

0 likes
Uncategorized

Australia Post abuses Government ownership today

The government cannot have it both ways. On the one hand they say they have to compete and have presided over their Government owned Post Offices moving into many lines sold by others including newsagencies. Then, on a day like today, they operate like a public service business and close. This behaviour demonstrates abuse by Australia Post of their Government ownership and benefits available to them which are unavailable to businesses like mine.

0 likes
Australia Post

Tattersalls extended by a year but supermarkets circling

The newspapers today have the story about Tattersalls being given a one year extension of their lottery licence in Victoria. The stories focus on the profit Tattersalls will make without having to pay for the additional year in rights. Missing from the story is the joy being felt in newsagencies and other small businesses like mine today. The one year extension is another year of certainty of traffic. Tattersalls products generate huge traffic for my business and this extra year is most welcome.

Related: Two days ago there was a story about supermarkets possible getting scratch tickets. Yeah, supermarkets don’t have enough to sell and need scratch tickets. Not! Scratch tickets should not be sold in supermarkets. Any government approving this is a government which has no interest in small businesses and their employees.

0 likes
Lotteries

Christmas greetings

Here’s a Christmas photo I took of the team at newsXpress Forest Hill this morning. I hope their smiling faces bring Christmas cheer to all who visit here.

DSC02322.JPG
Left to right back to front: Shaun, Luke, Jane, Steven, Laura, Lauren and Ben (the boss)

We’re having a good Christmas season. Cards, wrap, confectionery, calendars and even magazines are all up.

0 likes
Uncategorized
Trending Articles

Fairfax changes approach to TV Guide, disrespects newsagents

Published on April 20, 2011

What do you think of the Powerball changes?

Published on February 16, 2018

IPS releases new magazine contracts

Published on June 21, 2011