A decision by Menzies Distribution to introduce a surcharge for delivering News International (NI) titles to retailers outside London has been described as “an abuse of hard-working retailers by a monopoly supplier”.
Following NI’s decision to end its Direct to Retail distribution outside the Capital, with Menzies taking over delivery of NI titles, retailers had been expecting this carriage charge to be removed. But Menzies has applied an £8.50 flat rate weekly charge for sending out the extra titles.
Association of Convenience Stores (ACS) chief executive James Lowman said the surcharge was “a perfect illustration of why this market is broken”.
He added: “Menzies has introduced, with no consultation, a surcharge which breaks its own template for calculating carriage service charges. Unlike in any other category, retailers have no choice to change their supplier.
“Every shop would have to sell an additional 90 copies of The Sun to cover this cost. This is quite simply an abuse of hard-working retailers by a monopoly supplier.”
National Federation of Retail Newsagents (NFRN) president Alan Smith said: “This news comes as an absolute shock to the NFRN and it will anger our members, many of whom are already paying the maximum carriage charge to their wholesaler and had every right to expect that the carriage charge they were paying to News International had gone for good.
“Yet again such action by Menzies reinforces our long term belief that the two remaining wholesalers are being allowed to bid for and win contacts well below cost, with independent retailers having to pay the price.”
A spokesman for Menzies said: “From October 6 we will be introducing an interim delivery charge of £8.50 per week to cover distribution costs, including extra vehicles and changes to our routes as a result of the additional volumes we will be carrying.
“It is our understanding that the majority of these 1,900 retailers previously paid a much higher delivery charge. The situation will be monitored closely and reviewed in 12 months.”
On Friday the Competition Appals Tribunal heard a case brought by the ACS and the NFRN against the Office of Fair Trading’s decision not to undertake any further review of the industry. The Tribunal is likely to announce its verdict later this year.