Pressure continues to mount on smaller newsagents as a guaranteed supply agreement for newspapers comes to an end.
Lord Mandelson’s decision to release publishers from the restrictions of the 1994 Newspaper Code of Practice means they are no longer forced to supply newsagents who order their titles, and comes at a time of considerable uncertainty for retail newsagents, who fear the move could mean more remote stores will lose supplies or face prohibitive carriage charges.
John Lennon of the Association of News Retailers (ANR) said: “Without a statuary obligation to supply, wholesalers may be tempted to price ‘hard to serve’ retailers out of the market by increasing their carriage charges to unacceptable levels. We are working to ensure this doesn’t happen so that retailers can continue to operate even without protection from the Code.” Wholesalers argue that there are strong commercial reasons to continue servicing the full retail network.
The announcement coincides with new supply chain contract arrangements which see wholesaler Dawson News continuing to lose market share.
Both the ANR and the National Federation of Retail Newsagents have written to the Office of Fair Trading, which is currently considering referring the market to the Competition Commission, to point out the diminishing choice for retailers.
‘We believe recent contract changes will ultimately see Dawson News exiting the market, giving the remaining two wholesalers, Smiths News and Menzies Distribution, unprecedented supply chain power,” said Lennon. “We are heading towards a virtual duopoly.”
The OFT, which last year said it was minded not to refer the market to the CC, said it had not yet reached a conclusion on whether to ask for an investigation. “We have received some representations regarding recent market developments,” it said. “We will consider these representations before taking a final decision regarding referral.”