Government to free supply of newspapers

THE Government plans to sweep away many of the constraints on the supply of national newspapers imposed by wholesalers on retailers, following publication of a Monopolies and Mergers Commission report, writes Gail Counsell.

Neil Hamilton, the Corporate Affairs Minister, said the move, which goes beyond the recommendations of the MMC report, could have a significant impact.

The MMC found that the wholesaler WH Smith and the publisher News International had more than 25 per cent of their markets. It said the practice of displaying cover prices, requiring wholesalers to pass on specified retail margins, and the allocation of exclusive territories to wholesalers gave rise to a complex monopoly. However, it concluded these practices were not against the public interest.

But the MMC went on to find that another practice - under which 77 newspaper wholesalers can, among other things, refuse to supply new outlets when they feel an area is adequately served - was against the public interest.

It wanted a modest change under which retailers would have been able to sell copies to other retailers. But on the advice of Sir Bryan Carsberg, Director- General of Fair Trading, the Government intends to go further. It plans to ban wholesalers from refusing to supply retailers on the grounds that an area is already well served, or from limiting sales to specified outlets.