OFT Kicks Off Newspaper and Magazine Distribution

Jack Humphrey, Regulatory journalist
March 02, 2012 /

The OFT announced that, following a prioritisation assessment, including consultation with trade bodies and companies in the sector, it will not be carrying out an update review of the newspaper and magazine distribution sector.

During the consultation the OFT received information that since it last looked at the sector:

The overall in-store availability of newspapers and magazines has improved.
The number of retailers has remained stable, with well over 50,000 retailers across the UK, despite declines in newspaper and magazine circulations.
Average newspaper and magazine prices declined in real terms between January 2009 and August 2011.

There have been further steps towards self-regulation, including the establishment of the Press Distribution Charter, which includes minimum wholesaler service level standards for retailers.

Having made an assessment against its Prioritisation Principles the OFT has decided that, on the whole, consumers would not be likely to benefit significantly in terms of lower price, increased availability or greater convenience as a result of an update review and any subsequent further investigation of the sector.

Such a review would also not be justified in the light of the OFT’s current strategic priorities and self-regulatory developments in the sector. In view of these considerations, further investigation would not be a proportionate use of the OFT’s resources.

During this prioritisation assessment, the OFT has consulted with interested parties from across the sector and has carefully considered the information they provided. Ultimately, the information provided to the OFT supporting the case for not conducting an update review was more persuasive.

Louis Christofides, Director in the OFT’s Goods and Consumer Group said, “We recognise the importance of this sector to the UK economy and appreciate the challenges it currently faces. However, it is important that the OFT focuses its resources on work that carries the greatest impact for consumers. After carefully considering views from across the sector, we have decided that further investigation would not be justified as, among other matters, it is unlikely to lead to significant benefits for consumers on the whole.”

In September 2009, the OFT published its decision not to make a market investigation reference to the Competition Commission. The OFT stated at that time that it would consider, after two years, whether a short update review of the sector would be justified by reference to the OFT Prioritisation Principles, particularly whether such a review could bring benefits for consumers.

The OFT’s decision is the result of an assessment of whether a short update review of the sector is justified by reference to the OFT Prioritisation Principles. The OFT has not addressed, at any point during this prioritisation assessment, the application of the market investigation reference test in the Enterprise Act 2002 to the sector.

 

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