W H Smith Alleges Breach of Contract as Daily Mail Serves Notice to Quit

29 November 2000

W H Smith, Britain’s largest newspaper/magazine retailer and dominant force in print media distribution, yesterday hinted at legal action following Associated Newspapers’ decision to end its distribution contract.

Associated, publisher of the Daily Mail and the Mail on Sunday, has served WHS with the contractual six months notice to withdraw its business, which accounts for 40% of the titles' combined circulation.

Observers believe that WHS’ intention to launch a new newspaper and magazine distribution service [WAMN: 16-Aug-00] is at the root of Associated’s decision - a move tghe publisher believes could drive independent retailers out of business and limit newspaper distribution, especially in rural areas. WHS, however, insists that the present distribution system is antiquated, wasteful and inefficient.

The retailer is angered both at the decision and its concomitant effect on share price, which fell by 30.5p following the news. "We believe,” said a WHS spoke, “that Associated Newspapers, in serving notice of its intention to cease using WH Smith News for the distribution of a large proportion of its newspapers from the end of May 2001, is acting without justification and in potential breach of contract."

Word around the media parish pump is that trade and industry secretary Stephen Byers has been invited by WHS to intervene in the matter. [Highly unlikely, believes WAMN, given Byers’ growing reluctance to intervene in commercial matters - a chore he believes better suited to the Office of Fair Trading.]

News source: CampaignLive (UK)