Few retailers use the ISSA complaints procedure - but the number is growing

One of the curiosities of the Competition Commission's recent inquiry into the grocery market was that, despite suspicions that the four dominant retailers were abusing their market position in their dealings with suppliers, very little evidence was submitted to prove the point.
No one complained, so everyone must be happy.
In the case of newspaper and magazine distribution, the situation is neatly reversed. Many retailers believe that the three dominant wholesalers take advantage of their regional monopolies to deliver less than satisfactory service. But as the recently published annual ISSA Report on standards of service for newspaper and magazine distribution reveals, the 400,000 deliveries being made each week resulted in a total of 314 complaints to the industry's arbitration service in the 12 months to October 2007. Few people complained, so everyone must be happy.
The lack of complaints about the supply chain can be seen as proof that the existing system works, and it is hard to argue with the evidence that retailers are happy with the service they receive. And with the
OFT looking into the possibility of introducing external controls to the supply chain, the wholesalers, distributors and publishers will be delighted with retailers' apparent vote of confidence in the service they provide.
"On the basis that an average retailer receives about 400 separate picks per week and there are 54,000 retailers, the weekly opportunity for queries on supply is more than 22 million," says Adrian Smith of the Association of Newspaper and Magazine Wholesalers. "The number of ISSA complaints is extremely low and we believe this demonstrates an effective self-regulatory process."
That's a fair point, but even a 1% failure in supply would mean some 220,000 potential losses to news retailers every week - that's an average of four in each store.
The experience of most retailers is that supply chain hiccups do occur regularly, and when they do, it's they who end up out of pocket. Whether it's because of late delivery or failure to credit returns, it's the retailer - who is, after all, the customer - who loses out.
So why so few complaints? In part it's because the wholesalers have their own internal complaints and queries procedures, and these will resolve many issues. Retailers may also be unwilling to disrupt the good relationship they have with their supplier by making an official complaint.
Another explanation comes from the Association of News Retailers (ANR), which represents the newstrade interests of the 33,000 members of the Association of Convenience Stores (ACS). In a survey carried out last year, the ANR found that only 35% of retailers had heard of the ISSA complaints procedure.
The ANR's John Lennon says that those retailers who are aware of the complaints procedure find it time consuming and complex. "The time and expense needed to make a restitution claim is excessive," he says. "It's too cumbersome a process to be worthwhile for recovering what may only be a couple of pounds - but a couple of pounds every day is a significant loss to the retailer."
ISSA does not offer compensation for time or expense spent pursuing a claim, or indeed the cost of losing further sales, or even a customer. So the true cost of appeal will, in most cases, be far more than the amount you will recover.
For Subhash Varambhia, a Leicester retailer and long-term critic of the procedure, there's a further impediment. "Claims have to refer to a 'serious or persistent' breach of the standards," he says, "but no one is willing to define what's meant by that. It's ISSA's 'reject all' phrase."
It's worth persevering, however. As ISSA group chairman Neil Robinson says: "The mere existence of ISSA ensured that 92.4% of all complaints got resolved at the conciliation stage, with only 26 progressing to an independent arbitrator."
Clearly, no regional manager of a wholesale house wants to top the company's league table for the number of complaints received, so they'll be even more motivated to provide good service if the number of complaints increases. And
it is increasing: in 2006/07 there were almost 65% more ISSA applications than the year before, with customer service accounting for 28% of the complaints. This year's tally is already looking likely to dwarf last year's total.
ISSA's Robinson puts the rise down to "publicity in the trade press surrounding self-regulation" and it has also been argued that a rise in ISSA complaints would simply illustrate that ISSA is effective
as a method of regulating the existing supply chain - a line of thought which appears to suggest that the more complaints about poor service there are, the more it proves the current distribution model works.
ANR's Lennon suggests that the opposite is true. "This simply shows that self-regulation in the distribution process is unworkable," he says.
Perhaps it's the case that retailers, fed up with being the fall guy in an inequitable supply chain, are at the end of their tether and making their feelings known. If that's true, and they continue to use the ISSA process to highlight the supply chain's shortcomings, the case for a fundamental change will be hard to ignore.

How it works

ISSA is designed to resolve serious or persistent breaches by the wholesaler of any of the clauses contained in the Industry Standard of Service Agreement.
A copy of this agreement, and guidance notes for retailers, is available from the ISSA administrator on 020 8953 8694, email info@news-issa.co.uk.
If you believe you have been a victim of poor service, identify the clause in the ISSA agreement that has been breached and tell your wholesaler that you wish to make an ISSA complaint. Give the wholesaler sufficient detail of the breach and outline what remedy you are seeking. The wholesaler has 24 hours to respond to you.
If there is no response, or if the response is unsatisfactory, contact the ISSA administrator to request an ISSA complaint form - these can also be found at www.jointindustrygroup.co.uk/issa.Once you receive the form you have seven days in which to complete and forward it to your wholesaler, with a copy to the ISSA administrator. You will need to state on the complaint what happened, relevant dates, names of persons concerned, any relevant figures and the solution you are seeking. In addition, you should attach any relevant documentary evidence as proof of your complaint. If you are claiming financial restitution you must say so on the form and include a breakdown of the amount you are claiming, with supporting evidence. The wholesaler has 18 days to resolve your complaint.