The Australian Competition and Consumer Commission will reauthorise until 2001 the arrangements for distribution of newspapers and magazines in NSW/ACT, Queensland and Victoria.
"Today's announcement will give newsagents stability until 1 February 2001 while allowing movement toward a more competitive system as recommended by the then Trade Practices Tribunal in its decision on the review of the newsagents' authorisation," ACCC Chairman, Professor Allan Fels, said today.
The ACCC decision is:
the present authorisation is revoked. The reason for this is that the present authorisation is based on a set of circumstances which no longer apply. The Commission, like the Tribunal, has decided that there has been a material change of circumstances since the original authorisation was granted in 1980. The changes in circumstances include the style of retailing operations and trading hours; the rise of constant news availability in other media; and lifestyle changes, which all impact on the nature of the demand for newspapers and magazines and the way that demand is satisfied. a new authorisation has been substituted until 1 February 2001. This replicates the present authorisation. The basis of this is that, although the circumstances have materially changed since the determination which gave rise to the first authorisation, the Commission accepts that newsagents are entitled to a period of stability for some years to enable transition to proceed in an orderly manner. newsagents will be able to seek authorisation before February 2001 for remaining anti-competitive aspects of the system that have sufficient public benefit.
Professor Fels noted that "there were many submissions to the ACCC review. The decision is in keeping with the Commonwealth Governments 1996 submission to the ACCC to give newsagents a period of stability and to allow the parties to seek new authorisations for any remaining aspects of the distribution systems that restrict competition. It is also consistent with the views of the Tribunal, which saw a need for a period of transition before any change."
"About half of the average newsagents business is in the sale of publications and it is here that the restrictive arrangements operate, reinforced by horizontal agreements between publishers on territories and appointment of newsagents," Professor Allan Fels, said today. "The ACCC is not concerned with the other half of the commercially significant activities of newsagents such as retailing tobacco, confectionery, stationery, greeting cards, gaming, etc. which are competitively marketed.
"An important feature of the newsagency system is the distribution of newspapers for both home delivery and for retail sales. There was concern that the ACCC's consideration would adversely affect home delivery of newspapers.
"The Tribunal in its decision and the Commonwealth Government in its submission, however, recognise that an efficient, low cost home delivery system has considerable benefits, is very much in the publishers interest and is likely to continue. The ACCC agrees that there is ongoing public benefit in ensuring such a system continues even if it needs to be supported by some form of territorial exclusivity imposed by publishers.
"Distribution of newspapers and magazines to outlets for retail sale is also an important feature of the system. At the moment most outlets, other than authorised newsagents, receive supplies via their newsagent and must share the commission on a 50/50 basis with the newsagent regardless of the costs of delivery involved.
"Such outlets are also concerned about having to rely on the newsagent (who may well be their competitor) for supply and not being able to negotiate a different level of commission. Many retailers are concerned that they cannot get supply at all. A significant number of small business are adversely affected by this aspect of the current system.
"This aspect of the current system also imposes obligations on newsagents that some regard as onerous and inefficient and leaving them unable to adequately respond to changing market circumstances.
"The ACCC accepted that there are strong arguments on the part of retailers of newspapers and magazines which currently are dependent on the authorised newsagent for supply and on the part of those newsagents who feel shackled by the current system, that it be changed and changed over a reasonable timeframe, even taking into account the time which has passed since the Tribunal decision during which authorised newsagents have had the benefit of the system. But the ACCC is also conscious that if it does not allow an appropriate period of transition from the current system other authorised newsagents will be disadvantaged.
"The Commission has concluded that the change of circumstances means that the present system is not fully consistent with the requirements of the contemporary market.
"The ACCC concluded that the transition period needs to give both publishers and newsagents time to adjust and in the circumstances the appropriate period is until 1 February 2001.
"In deciding to authorise the continuing operation of the existing system for a fixed period the Commission has noted the submissions of the Federal Government. The submissions point the way to addressing those issues in the system that have been contentious for a very long period of time."
Briefly, the Commission supports:
widespread dissemination of information and critical comment; the operation of an efficient, low cost home delivery system for newspapers, even where this results in a territorial exclusivity; a mechanism to provide home delivery of newspapers to disadvantaged groups such as customers in outlying areas; opportunities for small business to develop delivery systems for newspapers and magazines; and the provision of a period of stability for newsagents and publishers to allow them reasonable time to adjust their operations to changing market circumstances.
During the period of transition, publishers and authorised newsagents need to make changes and to prepare for changes after that time which will be necessary to alter those parts of the system which are anti-competitive and do not deliver public benefit.
The ACCC's determination is available on this web site.
For further information about this media release: Professor Allan Fels, Chairman (03) 9290 1812 Acting Director Public Relations, Alana Woods (02) 6423 1108
"Today's announcement will give newsagents stability until 1 February 2001 while allowing movement toward a more competitive system as recommended by the then Trade Practices Tribunal in its decision on the review of the newsagents' authorisation," ACCC Chairman, Professor Allan Fels, said today.
The ACCC decision is:
the present authorisation is revoked. The reason for this is that the present authorisation is based on a set of circumstances which no longer apply. The Commission, like the Tribunal, has decided that there has been a material change of circumstances since the original authorisation was granted in 1980. The changes in circumstances include the style of retailing operations and trading hours; the rise of constant news availability in other media; and lifestyle changes, which all impact on the nature of the demand for newspapers and magazines and the way that demand is satisfied. a new authorisation has been substituted until 1 February 2001. This replicates the present authorisation. The basis of this is that, although the circumstances have materially changed since the determination which gave rise to the first authorisation, the Commission accepts that newsagents are entitled to a period of stability for some years to enable transition to proceed in an orderly manner. newsagents will be able to seek authorisation before February 2001 for remaining anti-competitive aspects of the system that have sufficient public benefit.
Professor Fels noted that "there were many submissions to the ACCC review. The decision is in keeping with the Commonwealth Governments 1996 submission to the ACCC to give newsagents a period of stability and to allow the parties to seek new authorisations for any remaining aspects of the distribution systems that restrict competition. It is also consistent with the views of the Tribunal, which saw a need for a period of transition before any change."
"About half of the average newsagents business is in the sale of publications and it is here that the restrictive arrangements operate, reinforced by horizontal agreements between publishers on territories and appointment of newsagents," Professor Allan Fels, said today. "The ACCC is not concerned with the other half of the commercially significant activities of newsagents such as retailing tobacco, confectionery, stationery, greeting cards, gaming, etc. which are competitively marketed.
"An important feature of the newsagency system is the distribution of newspapers for both home delivery and for retail sales. There was concern that the ACCC's consideration would adversely affect home delivery of newspapers.
"The Tribunal in its decision and the Commonwealth Government in its submission, however, recognise that an efficient, low cost home delivery system has considerable benefits, is very much in the publishers interest and is likely to continue. The ACCC agrees that there is ongoing public benefit in ensuring such a system continues even if it needs to be supported by some form of territorial exclusivity imposed by publishers.
"Distribution of newspapers and magazines to outlets for retail sale is also an important feature of the system. At the moment most outlets, other than authorised newsagents, receive supplies via their newsagent and must share the commission on a 50/50 basis with the newsagent regardless of the costs of delivery involved.
"Such outlets are also concerned about having to rely on the newsagent (who may well be their competitor) for supply and not being able to negotiate a different level of commission. Many retailers are concerned that they cannot get supply at all. A significant number of small business are adversely affected by this aspect of the current system.
"This aspect of the current system also imposes obligations on newsagents that some regard as onerous and inefficient and leaving them unable to adequately respond to changing market circumstances.
"The ACCC accepted that there are strong arguments on the part of retailers of newspapers and magazines which currently are dependent on the authorised newsagent for supply and on the part of those newsagents who feel shackled by the current system, that it be changed and changed over a reasonable timeframe, even taking into account the time which has passed since the Tribunal decision during which authorised newsagents have had the benefit of the system. But the ACCC is also conscious that if it does not allow an appropriate period of transition from the current system other authorised newsagents will be disadvantaged.
"The Commission has concluded that the change of circumstances means that the present system is not fully consistent with the requirements of the contemporary market.
"The ACCC concluded that the transition period needs to give both publishers and newsagents time to adjust and in the circumstances the appropriate period is until 1 February 2001.
"In deciding to authorise the continuing operation of the existing system for a fixed period the Commission has noted the submissions of the Federal Government. The submissions point the way to addressing those issues in the system that have been contentious for a very long period of time."
Briefly, the Commission supports:
widespread dissemination of information and critical comment; the operation of an efficient, low cost home delivery system for newspapers, even where this results in a territorial exclusivity; a mechanism to provide home delivery of newspapers to disadvantaged groups such as customers in outlying areas; opportunities for small business to develop delivery systems for newspapers and magazines; and the provision of a period of stability for newsagents and publishers to allow them reasonable time to adjust their operations to changing market circumstances.
During the period of transition, publishers and authorised newsagents need to make changes and to prepare for changes after that time which will be necessary to alter those parts of the system which are anti-competitive and do not deliver public benefit.
The ACCC's determination is available on this web site.
For further information about this media release: Professor Allan Fels, Chairman (03) 9290 1812 Acting Director Public Relations, Alana Woods (02) 6423 1108