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Regulation to be removed from newspaper distribution arrangements

DEPARTMENT FOR BUSINESS, ENTERPRISE AND REGULATORY REFORM News Release (PN-2009-117) issued by COI News Distribution Service on 20 April 2009

The Secretary of State has agreed with a recommendation by the Office of Fair Trading that newspaper wholesalers will no longer have to conform to a statutory code of practice requiring them to supply all new retail outlets.

The decision was taken following a review carried out by the OFT and an open consultation by BERR.

Wholesalers had been obliged to operate in accordance with an agreed code of practice governing distribution of national newspapers in England and Wales.

However, changes in circumstances in the market mean the problem the code of practice was designed to address - refusal to supply new retail outlets - is no longer a concern and not likely to re-emerge.

Competition Minister Gareth Thomas said:
"The responses we received to our consultation on this matter indicate widespread agreement with the OFT's advice. We are satisfied it is right to remove these regulatory requirements and leave newspaper distribution arrangements as a commercial matter for the market."

There will be a six month period for businesses in the industry to review and amend contractual agreements before the undertakings are released with effect from 20 October 2009.

Notes to editors

1. For further information and the full decision document please see the BERR website: http://www.berr.gov.uk/whatwedo/businesslaw/competition/law/news_dis/index.html

2. The OFT published its advice to release newspaper wholesalers from the statutory obligation to comply with the code to the Secretary of State on 22 October 2008 in a document entitled "National Newspapers: A review of undertakings relating to the supply of national newspapers in England and Wales".
On the same day BERR launched a public consultation, inviting views on the OFT's advice to be submitted by 14 January 2009. BERR received responses from a range of trade bodies reflecting the full range of businesses involved in newspaper and magazine supply.

3. The OFT recommended releasing wholesalers from the statutory obligation to comply with the code after identifying that three key changes in the market had taken place:

* Increased revenues for wholesalers from distributing newspapers, through Carriage Service Charges (CSCs).
* Publishers now have a greater role in the supply chain and have increased influence in ensuring newspapers are widely distributed.
* Newspapers are now widely available through a broad range of retail outlets which have become an established part of the market.