OPINION: Monopoly champions

I’ve been looking at the latest edition of the Press Distribution Charter (PDC), a document that sets out the standards of service retailers can expect from their news suppliers.

It was drawn up by the publishers, distributors and wholesalers, helped by an independent chairman, and like the version it replaces, it’s long on easy promises but woefully short on the guarantees that customers of monopoly suppliers need.

For example, the section on order and supply management states that: “In the event that a retailer’s requested order cannot be met, the retailer will be advised no later than the date of receipt of their intended supply.”

What this actually means is that you could find out on the day of sale that you’re not getting what you asked for.
This is not good enough – especially when the retailer discovers that plentiful supplies are available at other shops served by the same wholesaler.

Changes to a retailer’s standing order resulting from the wholesaler’s copy management process should not be made without the retailer’s agreement, but the PDC only commits the wholesaler to pre-notifying these changes “on request”.

Equally unsatisfactory is the absence of any meaningful system for compensating retailers. The charter has a complaints resolution process for dealing with ‘serious or persistent’ breaches of its service standards, but this offers only ‘restitution’ – which is limited to the amount that restores the retailer to the position he or she would have been in had the breach not occurred.

This is little more than a financial rap over the knuckles for the offending supplier: the inconvenience and any consequential loss to the retailer counts for nothing.

That’s why the same problems – late deliveries, misallocations and delays in passing credits – have persisted year after year, so much so that many retailers have given up complaining.

What is missing from the relationship between retailers and news suppliers is accountability. The charter goes through the motions – the charter’s very existence, apparently, is enough to satisfy the Office of Fair Trading – but it is not genuine accountability, because it is the suppliers themselves who have decided what they should be accountable for.

For example, the previous edition of the PDC allowed retailers a minimum of 17 days from the recall date to return magazines. This clause, which the retail trade fought hard for in the old ISSA agreement, has been dropped from the latest version of the PDC, presumably because the distributors and wholesalers didn’t like it.

Where does this leave the retailer? At the mercy of an unspecified time when the wholesaler submits its final returns claim to the publisher. That makes it so much easier for the wholesaler to say: “Too late for credit.”
At a time when fewer people are buying printed newspapers and magazines, the industry should be doing everything it can to make it easier for retailers to sell them. But the PDC points in the opposite direction: it’s a monopolists’ charter to protect the interests of the publishers, distributors and wholesalers that drew it up, leaving very little scope for retailer ­enterprise.

Since writing this piece I’ve learned that the NFRN is preparing its own charter, which will be launched in June. I hope it gains support from the wider retail trade, and that the publishers and wholesalers will finally get the message that their retailers would sell more copies if they were treated with far more consideration for their businesses.