UK Print Media Oppose Watchdog's Distribution Proposal

23 May 2005

Britain's secondary competition regulator, the Office of Fair Trading, would be well advised to keep its head below the parapet given the furore caused by the publication of its draft ruling on the distribution of UK magazines and newspapers.

Distribution is currently the preserve of a cosy coterie of wholesalers, each of which enjoys exclusive rights to distribute within a defined geographic area - an amiable arrangement that clearly suits both media owners and retailers, but has fewer obvious advantages for consumers.

The OFT sees the 'undertanding' as a contravention of the Competition Act. But in an eccentric exemplar of bureaucratic reasoning, it recommends its abolition for the magazine industry but not for newspaper publishers.

The latter, it seems, deserve to continue benefiting from a stitched-up market because of its need for daily overnight guaranteed delivery.

Unsurprisingly, the Periodical Publishers Association and the Association of Newspaper & Magazine Wholesalers have expressed their "strong and continuing concerns" about the OFT proposals.

But given the latter's willingness to retain the status quo for newspapers, it is less easy to understand the opposition of the Newspaper Publishers Association, which has also objected to the proposals. ['United we stand, divided we fall', perhaps?]

The draft opinion is now open for industry consultation until 17 June. In the meantime, PPA chief executive Ian Locks speaks for all beneficiaries of the current snug arrangement.

"We are disappointed that the OFT has not yet recognised … the immense damage we believe would be caused to both newspapers and magazines through increased costs, reduced sales and loss of choice for the consumer," he said.

Locks continued: "Newspapers and magazines clearly compete for consumer spend and time, as well as advertising revenue and personnel - and we believe the position currently being taken by the OFT would seriously distort competition between important groups of publishers in the marketplace."

Data sourced from Media Week (UK); additional content by WARC staff