ACCC authorises magazine distribution pilot program

25 June 2015

The Australian Competition and Consumer Commission has decided to authorise the Association of Magazine Publishers of Australia (MPA) to run a pilot magazine distribution program over 3-6 months with the 40 newsagents that have agreed to participate. This program will test the effectiveness of a proposed approach to address longstanding problems with the oversupply of magazines to newsagents.

The pilot program will involve an agreement between publisher members of the MPA, and distributors Gordon & Gotch, and Network Services, to limit the supply of magazines to newsagents participating in the pilot in a number of ways, including minimum sales efficiencies, ceasing to distribute titles after an agreed number of consecutive nil sales, reducing requirements for full copy returns, and limiting redistributions.

“This pilot will help to establish whether or not the proposed limitations on distribution are effective in addressing the oversupply problem,” ACCC Deputy Chair Dr Michael Schaper said.

“More information about what does and does not work will be useful for the industry in seeking to deal with this longstanding issue.”

There is widespread interest from newsagents in the specific arrangements and outcomes of the pilot. While the pilot has the support of newsagents’ industry organisations, a number of individual newsagents have raised concerns that the limitations on distribution to be trialled in the pilot will not address the problem of oversupply.

An independent report will be prepared for the MPA analysing the results of the pilot. The MPA will provide a copy of this report to the ACCC to be placed on its website.

“It is important that the MPA provide sufficient detail about the pilot to all industry participants, so that all stakeholders can have confidence in the process and contribute meaningfully to the development of an effective Code of Conduct,” Dr Schaper said.

The pilot is intended to assist with the development of a potential industry-wide Code of Conduct to address this issue. However, the ACCC’s authorisation of the pilot does not necessarily mean that it would automatically approve a Code based on these same distribution arrangements. Nevertheless, the ACCC considers that the information provided by the pilot can help inform discussions within the industry about the development of such a Code.

Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC may grant authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.

Further information about the application and granting of authorisation is available at: The Association of Magazine Publishers of Australia Inc - Authorisation - A91472

 

Release number: 
MR 108/15
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