Newsquest has moved to cut the margin percentage paid to retailers as part of a price increase on the National and Herald in Scotland.
Despite previous discussions with the Publishing fraternity on the importance of maintaining at least an 18 per cent margin to ensure retailers would at least break even earlier this year, Newsquest’s American owned parent company, Gannett Media, have decided to ignore this and cut margins to as low as 16.7 per cent on some titles.
Responding to the news, the NFRN (The Fed) National President Hetal Patel said: “The Federation has stated a policy of pursuing margin increases to protect the viability of News for members, this move directly flies in the face of this aim and is unwelcome.
“This move now means hard working retailers are expected to devote space and time to loss-making titles. I strongly encourage Newsquest to review this decision and get around the table for discussions on a way forward, and perhaps best avoid demonstrations taking place.”
News Category Manager, Andrew Williamson, added: “Gannett, the American company which ultimately owns Newsquest, have made this decision from their ivory tower and this move is a further step on a slippery slope for them and their titles. It is clear Newsquest understand that this move will generate severe frustration and a reaction from retail. Giving retailers less than 48 hours’ notice of a cut to their terms is underhanded and not the behaviour we nor our members expect in a professional trading relationship. Newsquest need to look closely at themselves and their behaviour in this matter.