NFRN calls on CMA to examine the news supply chain

On 11 April 2018, the NFRN delivered an ‘explosive’ document to the Competition and Markets Authority (CMA) detailing all the reasons why an investigation into the UK’s newspaper and magazine supply chain should be launched.

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NFRN National President Linda Sood (left) and Deputy Vice President Stuart Reddish, deliver the submission to the CMA’s offices in London on 11 April 2018

Senior NFRN officials Linda Sood and Stuart Reddish deliver the submission to the CMA’s offices in London on 11 April 2018

Disappointment as competition watchdog decides not to open market investigation into news industry

10 February 2019

The Competition and Markets Authority (CMA) has confirmed it will not be pursuing a market referral for an investigation into newspaper and magazine distribution in the UK for now.

Commenting on the announcement, NFRN National President Mike Mitchelson said: “While, admittedly this was a little disappointing, what was clear from the CMA’s response was that it has studied the grievances that were raised in our submission surrounding the many inequalities in the newstrade, and it obviously shares our concerns around the continued use of absolute territorial protection (ATP) contracts and the detrimental effect that this is having on retailers. So much so, that the CMA has promised to take publishers to task over their failure to self govern correctly and they will be warned that unless they mend their ways, they run the risk of a market investigation referral and the removal of ATP in future.

“This warning shot does mark a win for the NFRN. We will, however, continue to challenge both publishers and wholesalers until we see an end to the inequalities in the news trade.”

Here is an edited copy of a letter from the CMA following the NFRN’s request for a market investigation referral in the newspaper and magazine industry.


News industry briefing sent to MPs

5 November 2018

The NFRN sent a briefing to MPs and Peers on the news industry and its challenges, ahead of an open session organised by the Minister for Digital Margot James with Dame Frances Cairncross in November 2018.


CMA reviewing NFRN news industry submission

1 June 2018

On June 1 confirmation was given from the Competition and Markets Authority’s assistant director of markets that the regulator was reviewing the NFRN’s submission and considering possible next steps.


NFRN calls on CMA to examine the news supply chain

11 April 2018

Senior officials from the NFRN, led by National President Linda Sood, have called on the Competition and Markets Authority to investigate newspaper and magazine distribution in the UK.

Together with NFRN Deputy Vice President Stuart Reddish, the chairman of the Federation’s news operations committee John Parkinson and members of the  National Executive Committee, Mrs Sood delivered an explosive 32 page document to the CMA’s offices in London’s Southampton Row on Wednesday April 11 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 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.

 

NFRN Officials outside the CMA's offices in London

NFRN officials deliver the 32 page document to the CMA’s offices in London’s Southampton Row on 11 April 2018

 

The NFRN warns 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.”

 

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