ACCC proposes to look into oversupply of magazines

When we were pleased when we were contacted yesterday about the proposal by the ACCC to investigate oversupply of magazines, a problem that is costing unnecessary much in small business particularly in cash flow, labour and freight.

ACCC proposes to authorise magazine pilot program

12 March 2015
The Australian Competition and Consumer Commission proposes to authorise the Association of Magazine Publishers of Australia (MPA) to run a pilot program over 3-6 months with 20 newsagents. This program will test the effectiveness of a proposed approach to address longstanding problems with the oversupply of magazines to newsagents.
The pilot program will involve an agreement between publisher members of the MPA, and distributors Gordon & Gotch, and Network Services, to limit the supply of magazines to newsagents participating in the pilot in a number of ways, including minimum sales efficiencies, ceasing to distribute titles after an agreed number of consecutive nil sales, reducing requirements for full copy returns, and limiting redistributions.
The pilot will test whether the proposed arrangements will address longstanding problems for newsagents from the oversupply of magazines,” ACCC Deputy Chair Dr Michael Schaper said.
Most newsagents are small businesses which bear significant costs in dealing with a large volume of magazines that they can’t sell. These arrangements are a first step towards addressing these issues.
Newsagents have complained of problems caused by the oversupply of magazines for many years. Publishers have an incentive to oversupply newsagents to avoid losing display space to competing publishers’ titles, and distributors have an incentive to oversupply because they have been paid on a per-copy basis. Newsagents have generally been required to accept less popular magazines in order to also get the bestselling ‘masthead’ titles which every newsagent needs to stock.
The ACCC invites submissions on its draft determination before making a final decision.
Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC may grant authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.
Further information about the application and granting of interim authorisation is available on the public register
Release number:MR 30/15
Media enquiries:
Media team - 1300 138 917

For more details please click here.