On the surface it makes sense, Fairfax and News sharing trucks for newspaper distribution. It would be good if newsagents could unlock similar rationalisation so that they too could drive costs down and thereby achieve a better return. For example, it would be good is the rules of the newspaper distribution system allowed newsagents to include other products in a bag delivered to a doorstep with a newspaper.
Newsagents in some states have just been permitted their first delivery fee increase in years – these fees are set by publishers. Data suggests that in real terms newsagent compensation for each newspaper home delivered is considerably lower today than prior to deregulation. With newspaper cover prices – a key determinant of newsagent revenue – showing less than CPI increases, newsagents scramble to make more than a meager income from the delivery of newspapers. Hence the need to unlock their local distribution network for the delivery of other products at the same time as delivering the newspaper. The lack of return is one reason more newsagents are exiting from home delivery than at any time in the past.
It would be appropriate, if the discussions between Fairfax and News proceed further, that the ACCC considers the proposal at the same time as conducting a review of the impact of the 1999 deregulation of the distribution of newspapers and magazines overseen by the ACCC at the behest of the Federal Government.
Prior to deregulation, newsagents operated under a territorial system. Deregulation took that away and while we have an appropriately more competitive environment, newsagents ought to have been compensated by the Government for having their exclusivity unilaterally taken from them.
If newsagents were auto workers, farmers or chemists, the Government would most likely have thrown millions their way as it has done regularly to those industries to facilitate restructuring.
While not wanting necessarily to reopen the deregulation can of worms, there is no denying that newsagents did have something valuable taken from them by Government action without compensation.