Newsagents in South Australia were sent a letter yesterday by News Corp. about a cover price rise for The Advertiser to take effect from July 23. The distribution newsagent commission is 22%. With the retail newsagent getting 12.5%, the distribution newsagent is left with 9.5% unless there is something I and others are missing.
This situation comes about because the distribution newsagent is on a fixed fee. Concern would not be significant if the fixed fee was fair, if it reflected the work, risk and capital cost of being a distribution newsagent in South Australia, if it allowed fora reasonable profit over and above all the costs.
In setting the fee, News Corp. has not considered these factors in my view.
For me, as an observer, the issue here is fair pay for the distribution newsagent. I don’t think $0.2601 per copy is fair is it does not reasonably cover labour, infrastructure and other costs of running a distribution business.
News Corp. will respond and say it has an annual fee review process. While this is true, it is reasonable to question if the fee the company sets is fair compensation for the time and infrastructure required to do the work it demands.
It is fundamentally unfair that News Corp. sets the fee it pays newsagents as it is conflicted in setting the fee. The fee ought to be set by an independent party. The alternative is newsagents set their own fee. However, the problem with that is there will always be bottom feeders who undercut.