Following news of significant terms changes on the Bolton News and Brighton Argus, says NFRN, Newsquest has just announced that it is reducing the margin that retailers receive on a further 10 titles - five of which come without price increases - across the North of England and Yorkshire. All its titles in this region will now offer retailers terms of a “paltry” 18 per cent.
NFRN National President Ralph Patel said: “Terms reductions are always highly unpalatable for independent news retailers but usually they will come about when there are changes to newspaper cover prices. Newsquest, however, appears intent to ignore news supply chain protocols by reducing our members' terms and w e ask that the Press Distribution Forum (PDF) looks urgently into the matter and ensure that wholesalers are not simply invoking change without full consideration of the impact on the retailers that are bound by their terms and conditions of supply and associated notice periods.”
In a strongly worded letter to Newsquest, NFRN Chief Executive Paul Baxter warned: "Whilst retailers know that the fixed, printed price is only a recommended retail price and they are legally able to oversticker that price and insert one of their own should they wish, they are reluctant to do so, since this is likely to exacerbate a reduction in sales more acutely. That said, they will, of course, be re-examining the profitability of the portfolio of titles they sell and unless we are able to reach a compromise I will be reminding them of this and will advise that each gives only maximum support and maximum exposure to those titles that generate the most profit."
He continued: "I understand that you may have rising costs but so do my members and they, too, are not immune from increasing overheads and operational costs and are dependent upon pro rata terms to remain viable."
Brian Murphy, NFRN Head of News, said: “At this point in time we are awaiting a response from Newsquest but in the meantime, we have arranged for our members to meet with local representatives to understand why they are expected to sell their local newspapers at these enforced low margins. We are extremely unhappy that this supplier believes that it does not need to consult with those that command significant market share of its sales, yet somehow still expects their continued full support. Unless a compromise is reached we fully expect to see greater moves to overpricing of the recommended retail price or greater promotion of the more profitable titles in store."
Mr Patel concluded: "At a time of falling sales, publishers should be doing everything they can to work with the retailers who support their titles. Sadly, with Newsquest this is far from the case. The two cuts on the Bolton News and Brighton Argus were outrageous, and if Newsquest - which only recently announced profits of £70 million - thinks it can make further deep cuts without being challenged it has another think coming. There is no way that retailers will sit back and do nothing."
