My meeting at the ACCC on the magazine distribution trial

The magazine distributors have requested the ACCC that they be allowed to do a magazine distribution trial. This resulted in many responses from many interested parties. As a result they decided to make a hearing. I was invited to attend.

I found the meeting quite unnerving, as I am not used to talking on a video link there is no feedback and you wonder does anyone hear you, is it working even? This is what you see but the meeting is elsewhere.

There is much interest in this meeting as many people are concerned that they will lose their right to early return, which is the main mechanism, they have to control their magazine stock. Something that is not immediately on the table, although it may be a long-term goal of this trial.

As the discussion progressed, I think much of the problem appears with magazine distribution today in that there are two separate systems. The first group get what they are given and the second (supermarkets) that are allowed to pick and chose what they get. This puts the first group at a disadvantage because few think the magazine distributors are doing a good job. One telling statistic, I thought that was quoted at the meeting is that magazine sales are falling by 6 to 7% a year for many years but the magazine stock being sent out in dollar terms has not changed in the past five years.

The other issue is many people at the meeting felt offended, that here they were very experienced retailers, and it appeared to them based on some of the comments made by the magazine distributors that their experience was being deprecated. I felt similar as I felt our (POS Solutions) experience in analytics and category management was also being so treated.

On the trial itself, I do not think there was any problem with the participants. The majority view was clearly anything being done is better than nothing.

Newsxpress, a newsagent marketing group asked for the right for a trial that would allow newsxpress to select the magazines for some of its members so effectively moving the members in this trial from group one to group two and then use this trial to compare with the magazine distributor's trial. I doubt they will get that. The magazine distributors said it was too much work, something I doubt as all they have to do is move these people over to a supermarket model. Another problem with this is whatever the result of this newsxpress trial; it is not a solution for most people only for Nextra, Lucky Charm and Newsxpress members. That it would work I have no doubt as if one could cherry-pick magazines, I am sure more could be sold. If so, the reasons why the magazine distributors would not want such a trial are interesting to speculate too but another time.

My view is that the ACCC will let the trial proceed, which I have no problem. The people after all are volunteers who presumably can drop out if they want to. I am also fairly certain that these people in the trial will be allowed to early return.

My concern which I spoke about at the meeting was that the results of the trial if based on previous history of such trials, will be selectively released at best. Since during the meeting, the ACCC chairperson did support this as a valid concern and the magazine distributors did agree that they would do this, I think something will happen. My concern is just how much information will be released. I want it all, and I want it public. There is no point in knowing if you cannot talk about it.