Magazine distribution test to move ahead despite continued concerns over disadvantage

MPAA controversial pilot scheme to trial a new method of distributing magazines to newsagents will start in early June despite renewed claims it still leaves newsagents at a competitive disadvantage against supermarkets.

Magazines Publishers Australia along with distributors Gordon & Gotch and Network Services is set to move ahead with the pilot in 20 stores to test changes to a proposed code of conduct for distributors and publishers it says will make newsagents “a destination shop”.

However, Mark Fletcher, director of newsagency marketing group newsXpress told Mumbrella: “My view remains that the trial has not been constructed to meet its stated objective, that it is not testing any process changes that will enable newsagents to be competitive with supermarkets and other retailers of magazines.”

The trial will move ahead under the guidance of the Australian Competition Consumer Commission (ACCC), after the MPA asked for permission from the watchdog to extend it to 40 stores.

However Fletcher reiterated his concerns the proposed changes still left newsagents at a competitive disadvantage against supermarkets – a claim disputed by the MPA – as newsagents do not have the same powers to pick and choose the titles they receive.

While the pilot has the support of the Australian Newsagents Federation Fletcher told Mumbrella changes proposed by newsagents were not taken into consideration.



“I suspect that competitors of newsagents receive magazines through a set of rules, processes and commercial arrangements that competitively advantage them and that this could not be achieved if newsagents were treated the same,” he said.

“I suspect the treatment of newsagents enables publishers and distributors to treat newsagent competitors more favourably. I think there is data available from within magazine distribution businesses to support this claim.

“I am surprised to see the MPA announcement as the ACCC is yet to advise the outcome of the consultation process.”

Mary Ann Azer, MPA executive director, said Fletcher is “entitled to his viewpoint, but he doesn’t represent the industry”.

“In fact five out of the 20 stores in the pilot are Newsexpress stores , which Mr. Fletcher supposedly represents. We are working a solution that is suitable for all parties, not just one group. The model has to work for publishers, distributors and newsagents,” she told Mumbrella.

The pilot program, organised by the MPA who’s members are Australia’s three largest magazine publishers, Bauer, NewsLifeMedia and Pacific Magazines, will see distributors:

  • cease distributing a title if it has experienced consecutive nil sales for a period of time;
  • limit the number of copies of each magazine title sent to them to a certain percentage above the number of the title generally sold by the newsagent;
  • in most cases not require pilot participants to provide returns of full copies of unsold magazines, but instead accept front covers, headers etc as evidence of unsold copies;
  • adhere to certain restrictions on the redistribution of issues which have already previously been distributed, to the distribution of new magazine titles, and to split deliveries of magazine issues during the period the issue is on sale;
  • restrict the period for which the pilot participants are required to display magazine issues for sale to 12 weeks or less, except in certain circumstances.

While the MPA has interim approval to run the pilot with 20 stores ahead of a final decision by the ACCC the competition watchdog told Mumbrella it would expect the extension to 40 stores to also be approved.

On Fletcher’s claims on the changes leaving newsagents at a disadvantage the ACCC spokesperson said it was up to the industry “to make its own call” on those issues.

“Our role is to mainly make sure that exemption from the Act is covered. We don’t think it’s our role to sit down and say the newsagency industry should work in this way,” the spokesperson said.

If approved the pilot will create two groups of 20 stores which will trial different systems, with the MPA saying this will enable them to analyse the results and identify the value of the limited distribution and channel management initiatives versus the limited distribution only.

Alf Maccioni, CEO of the Australian Newsagents Federation, said in a statement: “We support any measure that will help newsagents increase their profitability within the magazine category. Magazines supply have been a legacy issue that to date has not been resolved. From this trial we believe that we will be able to obtain some valuable data that the ANF will share amongst its members. We are pleased that all parties have demonstrated a resolve to fix this issue.”

Miranda Ward


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