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

Is Tabcorp unfair in its expansion of the retail lottery network?

Tabcorp has approved plenty of new lottery outlets recently, expanding the network of retailers selling its lottery products.

The speed of growth in outlets does not feel connected to an increase in demand for over the counter purchase of lottery tickets. It does not feel as if there is a justification for the expansion in sales. Retailers say it feels like something else is in play. Maybe it has something to do with talk of some or all of Tabcorp being up for sale. Who knows? Not me, that’s for sure.

A chunk of new outlets have been fuel and convenience focussed, often open 24 hours a day. If Tabcorp adjusting its preferred retail format focus?

If you ask Tabcorp about the new approvals, they will say they have a thoughtful process they follow in considering each new outlet application and that existing retailers can appeal and any appeal is thoroughly considered.

To that, I’d say prove it. Rarely is an appeal successful. Rarely does the company explain why it made the decision it did.

Adding an outlet in a town of 5,000 where the existing outlet is not under pressure, is gold standard and have considerably grown sales does not make sense.

Adding 2 outlets within 5 minutes of another existing gold standard outlet with an excellent track record does not make sense.

I get that Tabcorp thinks adding outlets can add to its sales. Retailers will tell you no evidence flows from the company showing this to be the case.

The big issue here is that while Tabcorp is actively expanding its retail network, while at the same time rapidly expanding its online sales, the company continues to lay heavy and expensive demands on retailers as to the premium space to be allocated in-store, the considerable capital investment in fixtures and fittings and the extraordinary demands on training.

To plenty of existing lottery retailers it feels like the same rules do not apply to some of the new outlets, such as fuel. They say it feels like the existing retailers are penalised without consideration by Tabcorp.

Given that Tabcorp wants to considerably expand its retail network: to be fair to existing retailers, the company should stop demanding premium in-store space, reduce the considerable shopfit requirements and be more flexible in overseeing the operational rules.

Talking with some lottery retailers, the moves by Tabcorp are upsetting them, distressing them. I hear in their voices the harm this is doing.

Shame on those at Tabcorp who are responsible. Shame for what feels like a lack of care for the existing retail network.

Expanding as Tabcorp is its retail lottery outlet network does not feel social responsible.

The mental health of existing lottery retailers is being impacted by the expansion. The stress some facing a new competition is considerable. It taken them closer to breaking point. Not only because of the decision but also because of the dreadful processes Tabcorp has that make the existing lottery retailer feel helpless.

This is a mental health issue Tabcorp! It demands urgent senior management attention.

Regulars will know this does not affect me personally. I’ve not had a retail lottery outlet since 2013. Newsagencies and other shops can and do thrive without lotteries.

The best move a lottery retailer can make in their business today is to do everything possible to reduce reliance in the business on lottery product traffic and revenue.

13 likes
Ethics

Showing off changes in the card range

Too often, newsagents bring in new cards either by a supplier led refresh or introducing a change to supplier and don’t shout about it. In my shops we take a different approach, letting shoppers know about our changes, as they are happening.

In one of my stores we are introducing new cards and even though we are really only just beginning, we are pitching about it on social media. This pretty basic and quick to produce (less than 5 minutes) video shows some of the range change as well as, more importantly, the fixture change.

Content like this matters is social media is the most cost effective way right now to reach beyond the four walls of your business to find new shoppers.

6 likes
Greeting Cards

Appalling customer service from Nine Media’s Fairfax business when I try and cancel by subscription to The Age

I decided to cancel my subscription to The Age a three days ago. I figured it would be easy – log into their website, select my account and click cancel from the next billing cycle.

I figured, 1, 2, 3 and I’d be done. I figured that because that’s how online works. It’s easy, self-serve, fast.

But, not at Fairfax Media. Their approach is broken, cumbersome and laden with barriers.

I logged in. Then, I had to log in again when I selected my account. There was no explanation as to why I had to log in twice. I guess it as because they are two different tech systems.

Anyone, I got in. But once in, there was no button I could click to self manage the account.

I had to call or email the. So, I selected email, thinking I could write an email. But, no, that would be too simple for Fairfax Media to implement.

On selecting email, it took me to another page that I had to complete. They asked for my subscriber number. I went back to my account page, there is no subscriber number. I checked and checked and could not find it. So, back to the web form, I completed the details including having to tell them why I wanted to cancel.

But that was not enough. They will consider my request. They emailed suggesting I call them if it is a time sensitive request. It’s not, so I’ll let it play out. Gees, I hope they don’t call. I don’t want to speak with anyone. But … here we are 3 days later and I’ve heard nothing.

As I said, appalling customer service from Nine Media’s Fairfax.

If I was a Fairfax shareholder I’d be thinking about the manpower cost of such a broken subscription management system. Talk about broken, old-school, out of date. It’s a joke. My own small business subscription related consumer websites offer far better customer self-service experiences.

It’s simple really, Fairfax Media. I want to cancel my subscription. These hoops and barriers feel like it is a business strategy to keep customers, by making it too hard to quit.

The experience turns me off. It makes me want to tell others how bad dealing with them is.

The approach by Fairfax Media to managing online subscriptions is what I’d expect from a dinosaur business, a business out of touch with online. Oh, wait…

22 likes
Customer Service

Black Friday is here to stay in Australia

Whether we like it or not, the Black Friday retail sales event is here to stay. I say this based on personal experience and the experience of other Aussie retailers.

A gift shop I spoke with yesterday told me they doubled last year’s results and sole more than $5,000 in gifts online.

A homewares store owner told me that sales this year tripled what they did last year, delivering more than $10,000 in additional business.

Both commented that they considered the event itself boosted traffic to their websites from people looking at what was available and that, in each case, at least half purchases were at full price.

In our own case, we kicked it off in-store and online Thursday at lunchtime. While in-store store has been good, online has been excellent, achieving 100% growth off a good based from 2019.

We didn’t spend any money on ads or paid social media. Rather, we leveraged our email database and free social media posts.

Looking at online sales for one store, a small high street store, I can attribute more than $5,000 in online sales to the Black Friday event, with most of this coming from new shoppers. Now, it’s taken 3 years to get here, the be ranked by google, to have a good email database and to have access to sought-after products in a niche retailers who focus on price don’t play in. This has means that our Black Friday discount can be modest, yet interesting.

Whether retailers like it or not, you have no choice but to engage with seasons like Black Friday and Cyber Monday. There is money to be made.

Online is the best way to engage with Black Friday / Cyber Monday. While plenty of retailers have success with in-store, it is online where there is the most traffic. Also, as I harp on about, online never closes so you can transact with shoppers online at 1am and 2am and happily take their money if you have what they are looking for.

I get that plenty of small business retailers are yet to embrace online for their businesses because it seems too hard. I’d note that in almost every situation, the comment after getting online is I wish I’d done it sooner, I had no idea.

If you want to make money from Black Friday / Cyber Monday next year or any other growing online sales event, get online asap, so you are ready.

9 likes
Newsagency management

Herald Sun number stickers around Melbourne

Anti-Herald Sun bumper stickers are appearing around Melbourne as well as on social media. An online store has them. Here are a couple of them.

From what I can see there are at least 4 in the series, including this one:

Some are stronger in their word choice, like this one, which I grabbed from social media, from the folks behind the stickers from what I understand – The Shot.

It’s a sticker placed on a laptop. It’s certainly a clear message.

On social media, there is a push for people to buy them and give them to cafes that have banned the paper. I have seen a couple of posts from people suggesting they be used to deface outlets selling the paper, which would be wrong to do in my view.

There are some elements of this that remind me of the campaign in the UK against The Sun. The Shot has a story that draws parallels. It’s worth a read if you are interested in the history of a movement against Murdoch owned ‘news’ outlets.

It will be interesting to see if there is any long-term impact on the Herald Sun brand.

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Social responsibility

Ovato: taxpayer funds to cover employee entitlements?

This, from the Chairman’s address at last weeks (Nov. 26) Ovato AGM indicates that the company is restructuring in such a way that the financial responsibility to a chunk of employees who will lose employment is shifted to the Australian taxpayers.

In my opinion, it sucks. But … I don’t have the time to lobby on this. If I did, I’d say that in my opinion the trajectory of the company was set well before Covid, that those running the company should have known for years that restructuring was inevitable and that, for these reasons, the shareholders in the company should be responsible for funding employee entitlements, and, if they can’t, the whole business should collapse.

The restructure appears to be movements specifically designed to shift the liability for employee entitlements to taxpayers, and retaining, for shareholders, a smaller and, I guess, more profitable business.

But, hey, these are just my opinions. I am no expert.

I am, however, a long-suffering customer of the Ovato business, a business with inadequate infrastructure and inadequate strategic planning. It is my experience with these that feed into my wondering why Ovato is making the moves it is making and whether the reasons put forward as to justification for the restructure stand up.

Now, to be clear, I respect the folks working at Ovato. In my experience, they are professional and committee to Ovato customers. My issue is that the company does not provide them the resources they need to deliver the level of service we (customers) need.

But, more broadly on the restructure, I am curious as to the motives and long term plans of Are Media in all this.

I think it is important that employee entitlements are protected. However, I do not think companies should be able to shift things around through various structures controlled by essentially the same body for the purpose of avoiding the obligation of fully paying employee entitlements.

To me, what is happening at Ovato, the transfer of employee entitlement responsibility from the company to the taxpayer, could be considered through the lease of social responsibility. each time I see Ovato in the news, on social media and in emails touting business, there will be the reminder of how much taxpayers invested in remnants of the business so that the remaining business itself could trade.

Down here in small business land, most of us are not structured so that we can slice and dice and manoeuvre such that we keep the good bits and have others fund the funeral of the bad bits. I appreciate that sounds dramatic. Maybe I am missing someone but it is how it reads to this non accountant.

Newsagents continue to be treated poorly by Ovato., We do not have control over our level of indebtedness to the company, we carry considerable costs for wrong decisions by the company, we make bugger all margin on their products. Yet, we do it because magazines are a core category. That we do it, and they know we will, allows them to by inefficient and maybe that is a factor in getting them to the point of needing the restructure.

Who knows.

What I do know from the Chairman’s own words is that Ovato plans to restructure such that us taxpayers pay money towards the costs that will be a consequence of the restructure.

14 likes
Ethics

The Victorian government supports small business with faster payment

I welcome this announcement yesterday by the Andrews government in Victoria. This is good news for all small businesses that deal with the Victorian state government.

Fairer Payment Terms For Small Businesses Here To Stay
The Andrews Labor Government’s commitment to pay all small business supplier invoices within 10 business days – the fastest government payments timeline in Australia – will continue beyond the coronavirus pandemic.

Minister for Small Business Jaala Pulford today announced reforms to the Labor Government’s Fair Payment Policy, with payment terms for contracts under $3 million to move from the current 30 days.

The Government’s standing commitment to pay small business invoices within 10 business days leads all other states. Elsewhere, businesses are required to be registered or use a specific payment platform to obtain fairer payment terms.

Businesses consistently report cashflow as the most important issue facing small businesses –  these reforms will provide certainty as businesses begin to recover from the effects of the pandemic.

The new payment terms will apply to all new contracts under $3 million entered from 1 January 2021, allowing time for departments and agencies to prepare for the changes.

The Victorian Government has played a leading role in promoting fair payment terms for small businesses for more than 15 years, introducing the Fair Payment Policy in 2004 to improve cashflow certainty to operators supplying goods and services to the government.

Victoria is also the only state government signatory to the Australian Supplier Payment Code – a voluntary, industry-led initiative ensuring prompt and fair payment for suppliers through a set of best practice standards.

The latest reform will maintain Victoria’s national leadership in promoting fair and timely payment terms for small businesses.

The Labor Government has announced more than $13 billion towards measures to fight coronavirus including more than $7 billion in direct economic support for Victorian businesses and workers.

This includes $2.6 billion in funding which has supported more than 130,000 small and medium businesses through the Business Support Fund, rent relief through the Commercial Tenancy Relief Scheme and programs including Upskill My Business which provides free access to online short courses and the Business Recovery and Resilience Mentoring initiative.

Quotes attributable to Minister for Small Business Jaala Pulford

“As a big customer to many small businesses, we know this will make things just that little bit easier for thousands of operators from across the state.”

“The pandemic has knocked about our small business community and as we start to emerge on the other side, we’ll continue to provide them with practical support.”

7 likes
Social responsibility

The old newsagency agreement haunts our channel today

Doing a a clean out this week I found my Newsagency Agreement, signed April 3, 1996, with David Some & Co. Limited. I had a similar agreement with the Herald and Weekly Times.

I think these old agency agreements haunt our channel today as they are at the heart of the agent relationships that define many businesses. Even though most no longer have a distribution agreement, plenty do and others have a retail form of the agreement.

The agreement I found is 9 pages of one-sided obligation, like the Gotch agreement, the ACP magazines agreement, and, for many, the lotteries agreement. In each case, these agreements apply onerous requirements on newsagents to be agents.

Interestingly, I suspect the agreements would not meet the requirements of new regulations around agreements for small businesses.

While many in our channel are working hard at trading away from the old days, for plenty is is difficult to let go of core traffic from lotteries, newspapers and magazines, since they do see it as letting go. I prefer to see it as growing other roads (highways) of traffic so we are less reliant on the country roads of agency revenue.

It was nostalgic reading through this old agreement,I enjoyed it and the memories it recalled. I am glad those days are over for my businesses.

8 likes
Newsagency management

Hiring a new employee? reference check!

Someone I know hired a new employee in part because they knew someone the person had worked for for some years. They did not reference check. rather, they assumed that since they held the job for years they were a good employee.

The new hire was let go for cause after a few months.

Had the employer reference checked with their friend they may have been told the story as to why the person was not still working there.

While people can rate businesses anonymously on Google and myriad online platforms, there is no easy way for employers to rate employees. It’s not a good idea anyway for plenty of reasons.

What we do have is the ability to reference check. Employers should do this. Employers on the receiving end of a call will, of course, be cautious with what they say, and this may lead to insufficient details being shared.

The thing is, not making a reference check call may mean you do not learn something, even a hint, that could guide you away from a new hire.

In the story I recall above, the cost to the business of not doing the reference check was more than $15,000.

13 likes
Newsagency management

Promoting Better Homes and Gardens

We are actively promoting the latest issue of Better Homes and Gardens, which comes with the free bake mould for baubles.

It’s a terrific premium gift and we know these premium gifts work this time of the year. Our promotion is on social media as well as in-store where tactical placement for impulse purchase is the key.

This issue will easily sell out.

4 likes
magazines

If you are experiencing falling Facebook numbers

If you are experiencing falling Facebook numbers there may be a reason for this.

If you are promoting lotteries products, the Facebook algorithm will reduce who your page can reach. I have seen evidence of this. My advice to newsagents with lotteries is that they do not promote lotteries on Facebook.

If you have news in your name, Facebook may see your site as news related. Some are reporting a decline in traffic since the government initiated action seeking Facebook to pay for access to news. While I have not seen clear evidence of this, there is anecdotal commentary that it could be an issue.

Facebook is an evolving beast. Like anything you rely on in your business, it is not forever. It is important to spread your reliance across multiple platforms with on one thing playing a major role in generating traffic.

One option I have found success with is for the business to have more than one Facebook presence. This allows you to reach different people through different voices, from the one business.

6 likes
marketing

Tabcorp ignores retailers, encourages online purchase

At the website for TheLott, Tabcorp aggressively pitches online purchase and faintly offers help in finding a retail outlet. This screen shows their focus on online and their disregard for retail.

Add two this their relentless promotion on social media through paid advertising.

Then, there is their App promotion, encouraging people to purchase before November 24 for a gift of $5 for more spending. They say it can be used in-store, but the core focus is online spending.

I have heard from several newsagents over the weekend that they are angry by the actions fo tab copy promoting online. My, somewhat unfair, response is so? I have been saying for years online is their focus and that there is no upside for over the counter lottery product purchases.

Tabcorp has a responsibility that trumps all others and that is to its shareholders. Online serves that focus more so than in-store retail.

Years ago, before online, lotteries were rivers of gold for retailers. No more.

If you are a lottery retailer and update about their focus online, either get out of lotteries, or make your business less reliant on lottery revenue. But, for sure, stop complaining as it will achieve nothing and that Tabcorp is doing is nothing new.

That said, their behaviour toward retail compared to online is contrary to undertakings they have provided regarding promoting in-store purchase.

12 likes
Ethics

Why do newsagents rely on legacy suppliers for future direction?

It surprises me how much newsagents and others associated with newsagency businesses rely on legacy suppliers such as magazine publishers, magazine distribution businesses, lottery businesses, stationery suppliers, newspaper publishers and card companies for the future direction of the channel.

These supplier representatives are clueless about the future possibilities for the newsagency channel. I appreciate that sounds offensive,. That is not my intent.

They have no choice but to serve their needs and the needs of those who pay them, ahead of all others, ahead of the needs of newsagents.

When they are asked for ideas, advice or suggestions about the future for and of newsagents, they can only answer in the context of their needs, the needs of the businesses they work for, and what they know.

While they are nice people in these businesses, they do not usually have skin in the game, their own money, or the skill set to suggest a pathway to a brighter future for retail newsagents.

Most supplier representatives are not business owners, their investment is not the same as the investment of the owner of a newsagency. For them, what is at stake is likely not the same as what is at stake for newsagents.

Most supplier representatives are not retailers.

Most supplier representatives are not consumer facing.

Most supplier representatives are not innovative – you only have to look at their campaigns and their engagement with newsagents to see how old-school it often is.

Their hearts are in the right place. As I noted, they are nice people. However, they are not the people to engage with if you want a conversation about the future direction of your business or your channel.

Look, I own newsXpress, and in that newsagency marketing group there is an on-going discussion about the future. It’s been going on for years, as has change. It is an every day thing. But it is more than discussion. There is regular action for the group and stores in the group. The discussions and actions are evidence based, based on data from retail and based on sound research outside the channel, from other legacy business situations confronting change.

Dinosaurs will not save dinosaurs.

Much of the core traffic generators for our businesses are dinosaur businesses, facing extinction. Again, run by nice people with their hearts in the right place. But … their focus is on a soft landing for their business whereas your focus is on growth for your business.

Newspapers and magazines are in decline. despite the spin, sales data does not lie.

Stationery for most is in decline.

Lotteries will move online. I get Tabcorp publicly disagrees. Their actions, though, say something else.

None of this matters because there is much good news, much growth.

As I noted recently, there are plenty of newsagency businesses experiencing double digit growth in 2020 over 2019. 25% and more growth. better still, in most of those businesses there is a GP% growth, making the revenue growth more valuable.

To anyone wanting to talk about the future options for the newsagency channel, I’d say talk to those having success as they are already well ahead in the jungle, hacking a pathway forward, and having a good and successful time doing this.

11 likes
newsagency of the future

Reminder: newsXpress creative writing competition

Newsagency marketing group newsXpress has launched a national creative writing competition seeking entries of short stories, poems and songs that relate, somehow, in some way, to the Aussie newsagency.

Already, plenty of entries have been received.

Two cash prizes of $1,000 each will be awarded, one for anyone aged up to and including 17 and the second for anyone aged more than 17.

Writers are invited to submit a short story, first person narrative, song or poem. Each entry is required to in some way reference a newsagency, either a specific business or the type of business generally.

The local newsagency is the quintessential Australian small business, and through Covid the newsagency channel proved it’s value as an essential service to local communities. We wanted to explore a way of celebrating that.

The idea of this competition is to encourage creative writing by Australians, to shine a light on local stories and through these reference in some way the local Aussie newsagency.

newsXpress is a collective of over 200 local family owned and run newsagency businesses across Australia, mainly rural and regional. Most shops in the group have transitioned from the traditional to be modern. newsXpress businesses showcase Australian made products that help Australians express themselves.

To me, this is a perfect newsagency marketing group activity. It is fresh, creative and not tied to shoppers spending money in the business. It fits with my view that sometimes the best way to get from A to B is to head for C. I like it too because there is no supplier connection, no outstretched arm asking for help.

newsXpress is funding this itself, including providing retailers with A1 colour posters.

Here is more information about the competition:

This competition is run by newsXpress Pty Ltd.

There are 2 prizes: one of $1,000 for entrant up to and including 17 years of age and one of $1,000 for an entrant more than 17 years of age. Each winner will receive a certificate.

TERMS.

  1. All entries are to be submitted by email to writing@newsxpress.com.au.
  2. Each entry is to include a first page with entrant name, age in years and months, email address, name of local newsXpress business if known (not mandatory) and the name of the piece.
  3. Each page of the entry is to have only the name of the piece.
  4. Entries to be an original, previously unpublished short story, a song, a poem or first person narrative. Maximum word length: 1,000.
  5. Page format is to be A4, font is to be arial, 12pt. No images. For short stories and first person narrative, double spaced please.
  6. Entries to be in PDF or Microsoft Word format or a format easily read by either.
  7. There is no limit on entries per person.
  8. There is no entry cost.
  9. Entries close at midnight December 11, 2020.
  10. Each entry must, in some way, reference a newsagency. We are not being prescriptive as to how central a newsagency is to the story, song or poem. We leave that up to the writer. But, we do want there to be a reference at some point to a newsagency, any newsagency.
  11. The decision of the judges will be final.
  12. The winner will be announced on the newsXpress Facebook page and elsewhere no later than January 30, 2021.
  13. newsXpress will publish the winning stories on its blog, crediting the writer.
  14. Once the competition is over, all entries will be destroyed.
  15. newsXpress will not share entrant details or use them in marketing.

A newsXpress local store may choose to offer a local prize or prizes for entries from their area. This will be entirely managed at that local store level by the local store.

Footnote: I am the Managing Director of newsXpress.

2 likes
newsagency marketing

Hey, newsagents near Bermagui or Cobargo…

If you have a newsagency in or near Bermagui or Cobargo, you may be able to help…

6 likes
Newspapers

The importance of online as a Plan B

One thing, of many, we have learnt this year is the importance of a Plan B revenue stream.

That’s what online revenue is, Plan B revenue, revenue for when your prime source of revenue is challenged.

Even if your shop is closed and cannot fulfil, you can collect orders. In Victoria, stores that were closed were permitted to fulfil online orders.

What is happening in South Australia should encourage newsagents to be active on a Plan B revenue stream.

If you are not online, get online. This means selling online. That’s my recommendation. What you do is up to you. However, if you are not online you are missing out for sure.

While I’d love the web team of my newsagency software company to create your site for you, shop around. Look at locally based Shopify developers with a small business retail track record. Shopify has the widest use. It also offers the marketing and sales tools key to give your business a competitive edge online.

The biggest challenge newsagents seem to have with online is what to sell. yes, it can be a challenge to work this out. However, it is worth the effort to work it out. Even if you fail the first time, lessons learned can be valuable.

Work on a Plan B so that lockdowns and other challenges may be less impactful for your business.

8 likes
newsagency of the future

Gay Christmas ornaments selling well in Australia

Through my suburban newsagency we are selling the December Diamonds range of gay Christmas ornaments. They are selling well, primarily online though.

While we have been selling Christmas ornaments in-store and online for some years, this is our first year selling gay Christmas ornaments. It was a risk as the December Diamonds range was not readily available in Australia.

While we were at the Atlanta gift fair in January this year, we selected a a sizeable range of gay Christmas ornaments products and broader LGBTQI Christmas ornaments to offer in the Australian marketplace.

We received the products in late August and started offering them for sale in-store from September. Customers have reacted wonderfully. While they are pitched as gay Christmas ornaments, there are plenty that serve dual purposes, such as this one:

In-store they are placed on a tree, so shoppers can see them as they would look at home or work.

What is interesting is how people are purchasing these gay Christmas ornaments. It is rare they buy one at a time. Most common is 3, with plenty of sales at 4 and 5. Three is $210.00. That’s a nice sale.

This is opening a whole new market for the business, helping to expand how we see Christmas and ornaments more specifically. That is also helping our other ornament sales too, which is good.

We have promoted the gay Christmas ornaments with a series of social media posts of images, and videos like this one:

Here is another video we used early on to announce the range.

My point here is that we have not spent any money on marketing. rather, we wanted to see if we could build, traffic naturally, without promotions or deals.

We have not done anything significantly unique in promoting the range. The key has been in product selection, nurturing the supplier relationship to show what can be done here in Australia with a unique niche Christmas ornament range.

Overall, ornament sales for us this year are up 45% on 2019. Most of that has been online. In mention this to demonstrate that the in-store pitch is incidental to the core focus of the business. The shop offers primarily the fulfilment infrastructure.

While a core of the revenue from ornaments has come from repeat shoppers, we are serving a healthy mix of new shoppers, which is terrific.

Our hope is that next year, we will see even more business for the gay Christmas ornament range, further expanding the reach of the online business.

7 likes
newsagency marketing

SMH: Ovato seeks ‘restructure at the taxpayer’s expense’

From Nick Bonyhady at the Sydney Morning Herald, a story about the possible multi million dollar cost to taxpayers as a result of the proposed Ovato restructure, which is backed by Mercury Capital, owners of Are Media (formerly Bauer Media).

Printing giant seeks ‘restructure at the taxpayer’s expense’
A company controlled by one of Australia’s richest families has gone to court asking for a restructure that would see the taxpayer foot the bill for millions of dollars in workers’ entitlements.

Printing giant Ovato, which rolls magazines including The Australian Women’s Weekly and TV Week off its presses, is set to get a cash injection of $40 million backed by some of its largest shareholders including the wealthy Hannan family as part of the same restructure.

Australia’s taxpayer-funded Fair Entitlements Guarantee scheme is designed as a “last resort” to cover workers’ redundancy and leave payouts when a company collapses without enough money to cover them and there is no legal barrier to Ovato using it to restructure.

Ovato argues the restructure, which involves the loss of about 300 jobs in cities including Melbourne and Sydney, is necessary to keep the broader company afloat and save many more jobs in the future as the economy continues to struggle.

A report from advisory firm McGrathNicoll commissioned by Ovato said after the restructure about 300 workers would be employed by four Ovato companies with few assets and an estimated $18.3 million owing in workers’ entitlements.

The companies “will have no ongoing business or purpose and as a result in my opinion… will be insolvent” the report reads.

In documents released to the stock exchange, Ovato notes its former employees could turn to the FEG, which has seen its cost spiral from about $60 million in 2007-8 to a predicted $1.3 billion over the next three years.

Australian Manufacturing Workers Union official Lorraine Cassin branded Ovato’s actions a “disgrace” because workers face a delay getting their entitlements through FEG during the Christmas season and had repeatedly compromised with the company to keep it running.

Read the rest of the article here.

If true, this would be appalling. I would not want taxpayer funds used to settle costs flowing from any restructure.

5 likes
Ethics

Why the decision of the South Australian government to close newsagents during the second Covid lockdown is wrong

When the South Australian government announced this week the strong lockdown due to a new Covid outbreak in the state, the list of what could be open was tight, focussed. It fitted with how the Premier and the Chief Health Officer described the situation.

A few hours after the announcement, they started making changes. Bottle shops could be open. Pet shops, too.

As it evolved, the list from the state government was odd. For example, if they really wanted to stop movement, why allow all petrol outlets and all hardware stores to be open?

Newsagents expected their channel of locally owned and run community businesses to be added to the list. It has not happened.

Having lived and worked through the second lockdown in Victoria, here is why I think the South Australian government decision to not include newsagents on the list of businesses that can open is wrong.

News. While plenty of newsagencies have diversified, providing access to news remains a key traffic activity. While some may say petrol outlets and supermarkets sell papers too, they do not sell the range.

Foreign language news. In the stage 23 lockdown in Melbourne, the sales of foreign language newspapers spiked more so than local newspapers. In many places newsagents are the only outlet for these titles. It’s like the government has ignored those who rely on foreign language newspapers for news. This alone should be the reason newsagents are allowed to be open.

Local magazine publishers. Newsagents are the only retailers stocking many local, niche, Aussie magazine titles. With newsagencies closed in South Australia, those titles lose sales.

Financial transactions. Many newsagents offer financial transaction services.

Parcel collection and drop off. Many newsagents offer parcel services.

Mental health. As the main retailer of greeting cards, we naturally saw sales spike in the stage 2 lockdown in Victoria as people found other ways to connect. We know from what they said across the counter that they appreciated being able to do that.

Happiness at home. People at home crave things to do. Newsagencies are the best diverse outlet for crosswords, jigsaws, craft magazines, craft kits and related products. sales of these spiked in the stage 2 lockdown in Victoria.

The decision by the South Australian government has provided key competitors of retail newsagents a valuable free kick. Here is how…

Lottery products. The On the Run stores all qualify to be open. They have papers, magazines and TheLott lottery products.  Them being open while newsagencies are closed provides an opportunity to break shopper habits. It gives them a competitive advantage.

Greeting cards. Supermarkets and Post offices sell cards, again allowing the habit of the card purchase at a newsagency to be broken.

Magazines. The habit based newsagency magazine shopper may look at the supermarket range, find what they want and break their habit.

The potential for harm to so many small, family run, businesses in South Australia is considerable.

Newsagencies has been proven through Covid to be safe retail spaces. They were early adopters of an entry / exit strategy, acrylic screen protection at the counter, easy access to hand sanitiser and early users of masks.

I guess the biggest surprise related to pet shops that were added to the list of what could open after the list was first published. Supermarkets and vets cover all that pet owners could need. Yet, the government added them to the open list. The case for newsagents is stronger than pet shops in my view.

Don’t take that as me saying pet shops should not be open. I am not saying that.

Given the scope of the evolving SA list, I think the case for keeping newsagents closed has become weaker by the hour.

I hope the South Australian government, the politicians, the bureaucrats, the police reconsider and permit newsagents to open. Many in the community would applaud such a move.

9 likes
Social responsibility

Why are newsagents not on the list of retail businesses permitted to be open in South Australia in the latest Covid lockdown?

It does not make sense that those in control of the list of retail businesses that can be open in the second Covid lockdown in South Australia, which came into effect at midnight, does not include newsagents.

All through late yesterday and into the night the list evolved, as you’d expect in such a situation.

First to be added to the list of businesses that could open is bottle shops. In terms of priorities, that sends an odd message.

Now on the list, in addition to supermarkets from the original list, we can see pet shops, butchers, fruit and vegetable shops and fishmongers.

But not newsagents.

Distribution centres can be open. If I was a distribution newsagent I’d take this as permission to open.

Newsagents play a key role in keeping people informed and connected. They were identified as essential in the first national Covid lockdown and also identified as essential early in the second, and more restrictive, lockdown in Victoria.

My suggestion to South Australian newsagents is that they urgently reach out to local members of parliament as well as at the leadership level. make the case that your business is essential, be clear as to why. Urge them to lobby for the decision to be reconsidered. Keep the contact civil and stick to the facts.

In Victoria we saw News Corp. actively engaged on behalf of newsagents early on, seeking to ensure newsagencies remained open. Indeed, I think I recall seeing newsagents on a list from the Herald Sun of businesses that would be open before the government issued the list. I wondered at the time if that was a lobbying move.

I’d love to see News Corp outlets in South Australia lobby publicly on behalf of the channel.

Given how these things go, I urge newsagents to engage on this  now. In addition to calling and emailing local members of parliament, be active on your business Facebook page and the Facebook page of politicians. Don’t be whiney or needy. rather, speak to the importance of maintaining easy access to news and people to people connection. Stress that you are a Covid safe business, with all the necessary protocols in place.

The changes to the list of what can be open from the. it was first announced indicate flexibility.

One thing I thought all governments would have learned from the Victorian experience is to be prepared. Lists of essential businesses should be well established and thoroughly debated as part of good planning. That appears to not have been done in SA.

13 likes
Newsagency challenges

SA newsagents not listed on the SA government list of businesses permitted to remain operational during snap Covid lockdown

Here is the list issued by the state government a few minutes ago:

The following will be permitted to remain OPERATIONAL to maintain critical services only:

  • Critical infrastructure including power, telecommunications, water;
  • Supermarkets for essential food;
  • Medical supplies and medical services;
  • Public transport;
  • Airport and essential freight;
  • Petrol stations;
  • Post Offices and Banking institutions;
  • Child care and schools for essential services workers only;
  • Veterinary;
  • Essential agriculture services ;
  • Factories remain open for essential machinery upkeep and production of essential products only; and
  • Mining and smelting for continuity and to prevent damage.

In that state statement from the government a few minutes ago is this:

People will only be able to leave the house for the following reasons:

  • To go to work as an emergency services worker or to worker providing essential services;
  • For agricultural work;
  • To receive medical care including seeking COVID-19 testing;
  • To obtain medical supplies;
  • One person from the household once a day to attend supermarkets to obtain essential supplies;
  • Organised end of life visits;
  • In an emergency situation.

This is even clearer:

The following businesses will CLOSE:

  • Takeaway food services
  • Shops (excluding essential food services)
  • Universities and tertiary education facilities
  • Pubs/restaurants/café/food courts
  • Elective surgery/ except cancer
  • Open inspections and auctions
  • Fly in fly out worker
  • Aged care  and disability facilities will go into lockdown
  • Construction industry
  • Holiday homes and other holiday accommodation and no further bookings
  • Wedding and funerals cancelled and banned
  • Outdoor sport/fitness/exercise not permitted
  • Regional travel not permitted

Taking those three together, supermarkets are explicitly names, as are post offices, banks and petrol stations in terms of retail.

It is unexpected among suppliers and others involved with the newsagency channel that newsagents are not listed on this list. My understanding is that discussions are under way. The situation may change.

6 likes
Newsagency management
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