The NFRN statement:
“On Monday 16th November 2009 News International reduced retailers’ cash margin on the Sun by 1.16p
On Monday 30th November 2009 Northern and Shell reduced retailers’ cash margin on the Daily Star (Monday to Friday) by 2.42p.
This was followed on 5th December 2009 by a 4.84p cash margin reduction on the Daily Star (Saturday).
More recently, from 19th September 2010, News International has broken faith with pro rata terms with retailers and, instead of giving them 5p as their share of a 20p price increase, has withheld 3.3p and given retailers just 1.7p
Says National President Parminder Singh (pictured): “As we are told that the same prices and margins apply to every retailer, based on average ABC figures the combined effect of Northern and Shell and News International’s attack on retailer margins works out at close to £25m on an annualised basis.
“This is in a climate where newspaper and magazine sales are declining, all overheads are increasing and the National Minimum Wage increases again on 1st October 2010, the same date that the next round of carriage charge increases from Menzies Distribution kicks in. Smiths News customers have already had an increase in carriage charges from 8th August 2010. These new rates increase the overall burden of carriage charges placed on retailers to an estimated £100m+ according to our calculations.”
Mr Singh continues: “I am really puzzled by the behaviour of these publishers. Their sales are declining year on year, some of them have employed additional staff to support retail sales, and some have said that they want to work with us through the Press Distribution Forum.
“Logic would suggest that in a climate where they need to capture every potential sale, they would be going out of their way to support independent newsagents who make their titles available to consumers across the UK. So what do they expect to gain by hitting retail margins and giving retailers every reason to remove their support?”
Mr Singh adds: “I think these publishers are running a very high risk strategy. The Office of Fair Trading has already accepted that fixed, printed cover prices are anti-competitive and if publishers want to add abuse of retail margins into the mix, one imagines that the OFT is taking careful note.”
Mr Singh concludes: “I don’t think anyone at the NFRN can fail to be envious of Asda’s ability to delist the Sunday Times across its UK shops last Sunday, whilst the law prevents two or more micro independent retailers from getting together to take collective action to protect their interests. Perhaps it is a change to the law that is needed so that these publishers are not allowed to use fixed prices and reduced margins as a means to put small retailers out of business.””
