The Office of Fair Trading has published a draft of its opinions on newspaper and magazine distribution in the UK, saying that ‘current arrangements for distributing both newspapers and magazines that award local monopolies to wholesalers may harm consumers and be difficult to justify in terms of competition law.’

Many current agreements, says the OFT, involve each publisher awarding wholesalers an exclusive territory in which to distribute their titles to retailers, preventing the retailers seeking a better deal from rival wholesalers. Restrictions on competition of this kind are illegal unless ‘they have offsetting benefits, such as cost saving, that could be passed on to consumers’.

The Periodical Publishers Association (PPA) has expressed concerns that the new OFT stance would impact on the Newspaper Code – designed to underpin ‘the obligation to supply small retailers’, without which it may prove uneconomic to continue to supply them. Warnings that a considerable number of niche magazines and small newsagents could close and that supermarkets would dominate the choice of publications that reached the shelves soon followed.

The PPA continued that the OFT ‘appears once again not to have understood how the current system uniquely ensures the widest possible access to a free and diverse press’, with CEO Ian Locks adding that the report is ‘not looking at the wider public interest considerations’.

Recognising the possibility for conflict between the OFT’s opinion and the Newspaper Code, the OFT has launched a review of the code and expects to publish its final opinion in the first quarter of 2007.