“News International has announced that it is price marking the Sun at a standard price of 30p across the UK and reducing retailer cash margins in England, Wales and Northern Ireland currently held at 8.12p per copy on the previous 35p cover price, to just 6.96p per copy. At a stroke News International is taking 1.16p for every copy sold, more than £10m per year out of retailers’ tills, and risking a raid worth more than £120m per year loss to retailers if other publishers jump on the band wagon. £120m is more than the entire value that wholesalers currently impose on retailers through carriage charges. This, of course, relates only to newspapers; should magazine publishers start to attack newsagents’ margins, the outcome would be truly devastating.
The NFRN’s immediate reaction is one of utter revulsion and contempt. Whilst News International says that it wants to work more proactively with retailers, at the same time it has a knife poised to stab them in the back. This has shattered any relations that News International thinks it may have had with the NFRN and, as a first step, we have already rejected its sponsorship of CTN World.
If this action is true to form, we expect News International will have already bought off the multiple retailers (just see how quiet they will stay). But how News International thinks that it is going to win the hearts and minds of independent retailers by treating them this way is beyond comprehension. In fact if they think retailers are just going to allow this to happen, and encourage other publishers to follow suit, then they may have miscalculated badly. Whilst News International knows, and is relying on the fact, that the NFRN is prevented by law from organising any collective retaliatory action, there is nothing that the NFRN can do, nor would it want to do, to stop individual retailers from reacting to protect their own businesses.
One imagines that News International is arrogant enough to believe they are the main player in town and that no retailer will seek to encourage customers to substitute their title with another. Retailers, however, may well think otherwise when they now compare the pence per copy margin they are receiving for selling the Sun in comparison to other titles. Who could blame them, and who could blame other publishers for filling the void by making more copies of their titles available, whilst making retailers aware of their higher cash margin?
From the NFRN’s perspective, this is the “straw that broke the camel’s back”. As a result of this action the NFRN will do all in its power to inform its members about this attack on their livelihood and ensure that its members understand the relevant profit margins provided by other titles.
This issue will no doubt be a priority debate at next week’s Federation National Council meeting where the NFRN will be considering its full range of options.”
