Author: Mark Fletcher

The judgement issued last week in the Industrial Court of NSW in the matter of Newsagents Association of NSW and ACT Ltd v John Fairfax Publications Pty Limited [2006] NSWIRComm 409 has been published. This judgment confirms what I blogged on Dec. 28 – that the parties (NANA, the newsagent and Fairfax) are to participate in mediation to find a solution.

This case is significant for newsagents as it places before a court matters relating to the deregulation of the distribution of newspapers in NSW in 1999/2000. While the judgment is heavy going in parts, I am sure newsagents will find it fascinating reading. Newsagents will also be please to see the NSW Association (NANA) fighting in court on behalf of newsagents.

What is really playing out in this case is how to handle (or not handle) the consolidation of the 150 year old newspaper distribution network of newsagents.

Unlike chemists, farmers and auto workers, newsagents have been cast adrift by the Government. It ignited the deregulation bushfire and left newsagents to defend their family assets alone. Newsagents have hundreds of millions of dollars invested in their businesses in the form of goodwill. Publishers have a need to reach more customers for a lower cost and with more control. When the needs are mutually exclusive, the publisher can take the business and walk and this is where a question of goodwill and compensation comes into play.

While skirmishes such as that currently before the Industrial Court of NSW will break out occasionally, it is not until those who created the current situation revisit and investigate the ramifications of what they started that newsagent families can hope for a fair and equitable resolution of the matter. This means the Government, the ACCC, publishers and newsagents talking through what six years of deregulation has meant for the country and newspaper stakeholders.

Here’s what often happens with the craft, patchwork, quilting, crochet, knitting and sewing triple packs publishers send to newsagents. Customers want to see what they are buying and rip open the packs and often leave the mess for newsagents to fix. While I understand the need for triple packs, there must be a more retailer and customer friendly way than these sealed packs. The pack photographed, distributed through Network, can only be fixed by newsagents who have a heat seal packaging unit available. If we notice a customer looking we offer to carefully open the pack – this does not happen enough unfortunately.

Two months ago I blogged about the challenges of competing with Big W in selling the 600 page COOK book published by ACP. Well, we’ve sold 80 copies. The success has been as reminder to play outside the square in terms of what we sell and how we sell it.

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.

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.

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.

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.