Bad news

Chris Lyddon
The Politics Show
BBC South West

Newsagents across the South West are calling on the Government to take action to prevent thousands of them closing down.

Independent newsagents are closing at a rate of more than one a day.

In Britain as a whole independent newsagents are closing at a rate of more than one a day because of a decline in wholesale suppliers.

At the end of 2009 there will only be one major newspaper distributor left in the South West.

Many newsagents say with no choice of supplier, they could face increasing costs and may have to shut up shop for good.

Petition for action

Thousands of businesses have now signed a petition calling for an investigation by the Office of Fair Trading.

Paddy Paddison runs a shop in Hooe near Plymouth.

He tells the Politics Show, South West: "The pressure on this shop is intense. If we just sold newspapers, we wouldn't survive. We'd survive just a few weeks.

Newsagent Paddy Paddison says the pressure is intense

"What we've had to do is to go out and deliver milk, deliver fruit, deliver vegetables to make this part of the shop work."

In years gone by, there were hundreds of wholesalers providing papers and magazines to shops.

Later this year there will be just two major wholesalers left that can supply all papers and magazines. Menzies mainly for the North, and Smiths News, formerly WH Smiths, in the South.

Supermarket competition

"I don't have a choice about who sends me newspapers or who sends me magazines," says Mr Paddison.

"So I don't have a choice about how much they charge me to bring them here, how much margin I make.

"It's a worry for us as an industry that although you'd think that the industry is served well by the supermarkets, your Tescos and Asdas and things, most actual newspapers are sold from here. From little shops like this."

MP Dan Rogerson has signed the petition calling for an investigation

The Lib Dem MP for North Cornwall, Dan Rogerson is among MPs across the region who have signed the petition calling for an investigation.

"I can remember where we used to get our Sunday newspapers from when I was growing up," he tells the programme.

"I used to go with my dad to pick them up from a guy who just used to operate on a Sunday morning. A lot of those sorts of operations have gone now.

"And I think it will be a huge shame if the local shops that we have that people rely on, particularly people perhaps who don't have access to transport.

"If we lose those that will be a big hit for the local community."

Code of practice

Currently there is a code of practice under which wholesalers have to supply newsagents with papers no matter where they are geographically.

But there are concerns about what will happen when this code of practice disappears in October 2009.

Stefan Wojciechowski represents the National Federation or Retail Newsagents.

There is a code of practice under which wholesalers have to supply newsagents with papers

He tells the Politics Show: "The Monopolies and Mergers Commission back in 1993 understood then, even, the monopoly supply chain and the fact that retailers couldn't even then get service they required.

"So they implemented a legally underpinned code of practice and that code of practice has very recently been deleted by the Department for Business, by Lord Mandelson.

"And the key to that code of practice was mandatory supply of newsagents. That has now gone so come October effectively this year it is unknown as to whether independent newsagents in future will get supply from their wholesaler."

Stopping sales

Gerry Hancock has been running his newsagents in Plymouth for six years.

But he says after almost daily mistakes by his supplier Smiths News, he decided to stop selling papers and magazines.

"It was getting to a stage every day with my wife dealing with the newspapers on the telephone all the time," he says.

The traditional newsagents - facing a tough time

She was getting so upset over it that I thought she was going to have a breakdown.

She said "I can't do it anymore.

"I phoned them and said just stop it. It's gone too far now."

These days Gerry only sells the local paper, and while he loses about £1,000 a week by not selling a range of papers and magazines, he says at least the stress levels have come down.

Stressful times

Vince Ladd from Hoopers in Plymouth knows all about stress.

He told the programme: "Take a Break is a big seller, a weekly magazine. But it just didn't get delivered today. They have them in stock there. They just messed up on the delivery.

"So today we haven't got Take a Break. We'll get it tomorrow, probably, but we'll lose 50 to 60% of the sales on that."

Vince says his suppliers Smiths News often make mistakes. But he says big customers like the supermarkets get compensated for mistakes, but small shops do not.

"Well it's not fair is it?" he says.

"They are making better margins, they are paying cheaper prices and yet they are still being treated more favourably than the independent retailers."

Highest standards

The Politics Show South West asked Smiths News for an interview, but they declined.

Instead they issued this statement: "Smiths News takes its responsibility as the UK's leading wholesaler of newspapers and magazines very seriously and is fully committed to maintaining the highest standards of service and efficiency for publishers and retailers alike, both large and small.

"We operate to some of the best performance criteria in the market with on-time delivery running at 98% and newspaper and magazine pack accuracy currently 99.8% and 99.7% respectively.

"Our industry has indeed been the subject of a long and thorough review by the Office of Fair Trading.

"As a direct result, the wholesale distribution market has been released from the National Newspaper Code of Practice. Regardless of this legislative change Smiths News remains committed to providing the best possible service to all our customers at all times.

"Under no obligation from government Smiths News has drawn up a service charter that was sent out in a letter to all our customers in May on 2009 which states that:

· There will be no change to our policy of supplying all our customers in our territories and we will continue to supply all our existing customers, regardless of their size or location.

· This guarantee also applies to those retailers in any new territories we will serve as a result of publisher contract changes and we will continue to subsidise distribution to small and rural outlets and will introduce new procedures to further help and encourage these retailers."

Fair trading

A spokesman from the Department for Business, Innovation and Skills told the Politics Show that the Office of Fair Trading would announce a final decision in September 2009 on whether to refer the sector to the Competition Commission for investigation.

When the programme asked why the Code of Practice was being withdrawn the spokesperson told us:

"A report by the Office of air Trading found there are significant commercial incentives for both publishers and wholesalers to ensure effective distribution of newspapers.

"The Code was not a key factor in determining whether or not a retailer was supplied."

Watch the Politics Show on BBC One at 11:00 GMT on Sunday.

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