Menzies has lost millions of pounds worth of trade following NewsTeam Group’s decision to begin supplying Menzies regions with newspapers and magazines sourced from Smiths News.

Industry sources told Better Retailing that NewsTeam Group – the UK’s biggest home newspaper delivery firm with more than 100,000 customers, is withdrawing from operating within more than five Menzies depots.

Previously, NewsTeam Group had used space in these depots to receive, sort and send out copies to nearby homes and businesses. Going forward, NewsTeam Group will instead source newspapers and magazines from the nearest Smiths News depots to supply these areas.

Better Retailing understands the volume of copies to be switched is worth millions of pounds in extra retail sales value passing through Smiths News rather than Menzies depots.

NewsTeam Group’s actions causing a headache for Menzies

The decision follows a similar move by NewsTeam Group several years ago, when it began sourcing magazines from Smiths News in Newcastle to supply households and hundreds of shops across Menzies-controlled Scotland.

Despite supplying stores with newspapers and magazines in some regions – known as sub-wholesaling, NewsTeam Group is not classed as a wholesaler. This means it is not bound by the government-enforced Absolute Territorial Protection (ATP). ATP gives Menzies and Smiths News exclusive newspaper distribution rights in different regions.

One publisher told Better Retailing the decisions represent ‘a major headache’ for Menzies as it rebrands to ‘InPost Newstrade’ and attempts to reassure partners of its continued commitment to print media.

Reports on the rebrand claim Menzies promised “absolute continuity and stability in our newstrade operations”. Explaining the ending of the nearly 200 year history of the Menzies name, the company said adopting its parent company’s name would help it “realise the benefits and opportunities” that parcel and locker firm InPost can bring for “publishers, distributors, retailers and our shared consumers.”

InPost completed its acquisition of Menzies Distribution three months ago. It paid £60.4m for the remaining 75% stake it did not previously own.

According to sources, NewsTeam Group’s decision was motivated by its mission to diversify from just newspapers and magazines. The company now also distributes goods including milk, eggs and household paper products.

Menzies and NewsTeam Group failed to respond when approached for comment.

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