Home' The Channel Magazine : National Newsagent June 2015 Contents 9
National Newsagent - June 2015
approached the ACCC in late 2014 for authorisation to initiate
discussions with magazine distributors Network Services and
Gordon and Gotch and the ANF with a view to drafting an
industry Code of Conduct.
The draft Code is potentially an anti-competitive agreement
amongst competitors and is unlawful unless authorised by the
ACCC on public benefits grounds.
What is the proposed solution?
The proposed solution involves three pillars:
1. Code of Conduct—addressing category profitability at
newsagency level by implementing agreed limitations on
distribution of magazines based on targeted minimum
2. Channel Engagement—a campaign of education and
engagement of newsagents to revive interest in the
3. Retail Skills—focussing on engaging and training
newsagents on category management and efficient
operation of the category.
The MPA members represent approximately 63% of sales
revenue and only 7% of total number of titles distributed
to newsagents. To restrict the limitation of supply only to
MPA members will not address the issue of oversupply
therefore the distributors will play a key role by agreeing to
simultaneously implement the MPA Code of Conduct across
All parties to the discussion agreed to a three to six month
trial involving 20 retail newsagents. (Plus an additional 20 for
a control group.)
This trial group would operate under the draft Code for the
length of the trial and all relevant data received would be
made available to publishers, distributors, the ANF and its
members and other interested parties for consultation.
Why is there a trial?
The trial is intended as a proof of concept. By implementing
best practice, the MPA and ANF hope to identify what the
economic benefit is for all stakeholders within the supply
chain. The objective is to make the distribution of magazines
more efficient and profitable for newsagents but at the same
time ensuring that all publishers and distributors have a
distribution model that is sustainable over the long term. MPA
expects that the pilot will help identify where the economic
benefits sit in a revised process and therefore allow all parties
input and visibility to how a new model could be supported in
Why is the ANF involved?
The Australian Newsagents’ Federation (ANF) has reported to
the ACCC the issue and impact of oversupply to its members
for many years. The ACCC has always advised that in its view
the conduct did not breach the Competition and Consumer
Act 2010 or any previous versions of this Act.
This Code of Conduct is now possible primarily due to the
Publishers’ and Distributors’ needs for print and distribution
efficiencies. This is an opportunity for publishers, distributors
and newsagents to work together and find a solution that
will keep the category relevant in the newsagency channel.
The ANF is involved in the Code of Conduct to ensure
their members’ best interests are represented and that the
outcome of the Code has a positive impact on their members’
The ANF has consulted intensively with members prior to the
draft Code being drawn up and will continue to provide their
members with a voice on this important issue.
What is expected from the Code?
Improved sales efficiencies
To cease to supply after consecutive nil sales
Reduce requirements for full copy returns
Limit redistribution of packs and singles
Limit maximum shelf life
Limit Early Returns
Over time and to manage cash flow some newsagents have
increasingly depended on early returning magazines in the
absence of availability to control their allocations. This is
potentially damaging to both newsagents and publishers and
an improvement in sales efficiencies along with the other
requirements within the code will significantly reduce the
need to early return magazines. If the draft Code is successful
in addressing the above areas, newsagents will see a
reduction in current labour costs to manage this category.
Newsagents who currently return ‘Full Copy’ will experience
a noticeable decline in the cost of freight.
The proposed solutions will address category profitability
with the Code, include a campaign to encourage greater
channel engagement and revive interest in the category and
also focus on the skills required to equip newsagents with
management tools which will lead to efficient operation of the
Will I have a voice?
Yes, once the trial has been concluded and the data
compiled, the ANF will invite members to participate in the
decision on whether or not to adopt the draft Code or make
suggested changes with a view to improving and adopting a
Why haven’t distribution-only agents been
selected as part of the trial group?
Distribution-only agents have a different model. Once this
retail pilot is underway investigations will be made to see if
there are any distribution-only agents who would be willing to
work on a better system that would suit them.
Will the Code of Conduct address all
existing supply issues?
The ANF acknowledges that these proposals will not
overcome all current magazine issues but it is a starting point
which will lead to an improved business relationship between
newsagents, distributors and publishers.
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