Call for news supply chain review after Reach once again cuts retail terms

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As newspaper publisher Reach has continued its practice of reducing retail margins alongside cover price increases, the Federation of Independent Retailers (NFRN) renewed its calls for a review into fairness in the news supply chain.

The price of the Sunday Mirror and the Sunday People will rise 10p to £1.80 from this weakened, but the retailers’ term has cut from 20.5 per cent to 20 per cent.

The cover price rises of the two titles in June last year were also accompanied by a 0.5 per cent fall in terms.

“Time and again we have made it clear to Reach that we cannot continue down this line of a cut to the retailer’s percentage terms every time there is a price increase,” commented Stuart Reddish, national president of NFRN.

“Now, more than ever, independent retailers are operating under intense financial pressures and pro rata terms are a necessity if retailers are to stand still. Reach’s actions are short-sighted.”

The publisher has earlier this year cut retailer margin with the increase in cover prices of the Daily Express, the Daily Star and the Saturday edition of the Daily Mirror, consistent with an approach it has taken last year.

Reddish said the news industry needs to review this practice for its own survival.

“We don’t accept terms reductions accompanying price increases but we have to live with them, whilst ever the news industry operates as a monopoly,” he continued.

“If the newspaper sector is to survive the whole industry must look at the way it is set up as it is unfair to continually chip away at the retail margin whenever there is a price rise.”