Together with Deputy Vice President Stuart Reddish, the chairman of the NFRN’s news operations committee John Parkinson and members of the Federation’s National Executive Committee, Mrs Sood delivered a 32 page document to the CMA’s offices in London’s Southampton Row that explains why a market investigation into the news supply chain must go ahead.
Within the document, the NFRN explains how developments within the marketplace since the last OFT investigation in 2012 have caused substantial damage to independent retailers and their customers.
The NFRN has documented how the death of hundreds of local newspapers, the dearth of new launches and the closure of news retailers has impacted significantly on consumer choice and the quality of products now available.
The plight of news retailers, who, says the NFRN, face high – and ever spiralling – carriage charges, reduced margins, deteriorating service from news wholesalers and restrictions on the range and quality of titles supplied, is also recorded at some length.
The NFRN argues that because news wholesalers enjoy absolute territorial protection (ATP), they have little incentive to provide an adequate service to retailers who have no opportunity to switch suppliers. In its submission, the NFRN warns that newspapers and magazines are the only product sold by its members which are both protected by ATP and have a fixed universal cover price.
Calling for ATP to be removed, the NFRN believes this would reintroduce competition and allow retailers to choose who they do business with.
Commenting on the NFRN’s call for a competition market investigation, Mrs Sood said: “Independent news retailers feel under siege from all corners of the supply chain. We have to contend with spiralling costs, greatly reduced margins and a service from news wholesalers which is frankly a disgrace, and all this is happening at the same time that newspaper and magazine sales are falling.
“Hundreds of local newspapers have closed, newsrooms have been decimated and the retailers that sell these products could be consigned to history if regulatory action is not taken.
“What is happening is bad news for news retailers and bad news for our customers. That’s why we need the CMA to take action against the clear anti-competitive behaviour in our industry and establish a level playing field throughout the news supply chain before it is too late.”
