Newsagent shake-up 'a disaster'

THE DAYS of being able to buy a paper or magazine from the local newsagent could be numbered, retailers warned yesterday.

Leaders of the organisation that represents nearly 20,000 independent retailers said plans by the Office of Fair Trading to shake up the way publications are delivered to shops would be 'disastrous'.

Joining forces with publishers and distributors to oppose the OFT's provisional ruling, the National Federation of Retail Newsagents said thousands of small newsagents and corner shops could be forced out of business.

'We've been losing vast numbers of full-service newsagents over recent years,' said Peter Wagg, who recently stepped down as federation president. 'We believe that will accelerate considerably if this goes forward.'

The federation says as many as 8,000 newsagents have closed over the last ten years. And although it is wary of putting a figure on how many more will be driven under by the OFT's proposed changes, a leading economist has predicted it could be as high as 12,000.

The OFT has decided the current system, where distributors have a regional monopoly to deliver magazines and newspapers to shops, is anti-competitive and should be opened up to market forces - at least as far as magazines are concerned.

Newspapers have been exempted because there was an overriding public interest that people could still buy them at their local shop. But the NFRN denounced this as the 'worst-case scenario.' It said the OFT had 'completely failed to understand' the inextricable link between newspapers and magazines which are delivered in the same lorries at the same time.

Splitting up their distribution would massively increase costs, which would be passed onto retailers - particularly those in isolated rural communities - and force many into bankruptcy. Meanwhile, the large supermarket chains, which already account for up to 40 percent of magazine sales in some categories, would be able to exploit the new regime.

Mr Wagg said newsagents were keen for a new code of conduct between publishers, distributors and retailers to help combat cases of 'persistently bad service from a monopoly wholesaler'. But the federation was not in favour of the system being completely broken up.

The NFRN submitted a formal response to the OFT's proposals on Tuesday, at the end of the regulator's consultation period. The Periodical Publishers' Association yesterday welcomed the newsagents' support. It has told the regulator that unless magazines are given a similar exemption from competition rules as newspapers, 'the supply chain would inevitably unravel, threatening the future of a free and diverse press as well as the democratic process as a whole'.

For its part, the OFT said last night it would examine the NFRN submission along with the others it received. Its final decision is expected within a few months.