11 August 2000

A new spirit of compromise is in the air following the acrimonious stand-off between Tesco, magazine publishers and the Periodical Publishers Association.

At issue is the new Tesco/W H Smith joint distribution system for magazines and other publications. From October this will invade the cosy market currently controlled by a geographically exclusive arrangement between John Menzies, W H Smith and Surridge Dawson [WAMN, 2,3 & 8-Aug-00].

It is not the new entity itself that has sparked the row – but Tesco’s threat to de-list from its 658 outlets any publication that refuses to join the scheme. The chain accounts for around 7% of all magazine sales.

After several weeks of requests for talks from the PPA, the supermarket has finally agreed to meet with publishers’ representatives and three specialist distribution companies - Comag, Frontline and Marketforce. Tesco insists that it has always been willing to discuss compromises.

According to the PPA’s Ian Lock, publishers “want to meet Tesco's needs without the wholesale destruction of the distribution network”. What his members want, Lock adds, “is to guarantee consumer choice and availability”.

Tesco argues that the current distribution system is grossly inefficient and fails to respond either to consumer needs or fluctuating demand. "In some areas of the country there are far too many magazines. In other areas ... there are too few," it said, citing the case of one store which sold a large number of FHM and Loaded magazines to students during university terms and virtually none during vacations.

News source: Financial Times