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Newsagency system -statement by the representative of the Minister for Baca before the Trade Practices Commission



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BACA

DEPARTMENT OF BUSINESS AND CONSUMER AFFAIRS

. 79/50

STATEMENT BY THE REPRESENTATIVE OF THE MINISTER FOR 'BUSINESS AND CONSUMER AFFAIRS BEFORE THE TRADE PRACTICES COMMISSION ON 20 MARCH 1979 IN RELATION TO THE NEUSAGENCY SYSTEM

The Minister for Business and Consumer Affairs, Mr Ual. Fife, today released the text of the statement delivered in his name this morning before the Trade Practices Commission in relation to the neusagency system:

The Commonwealth Government supports the neusagency system Heads of Agreement which has been submitted to the Trade Practices Commission.

As indicated by the Minister for Business and Consumer Affairs last week, the Commonwealth Government has been closely watching developments in relation to the consideration by the Commission of the neusagency system operating in N.S.U. and the A.C.T. Since the Commission's draft decision on this matter, which concluded that the . system substantially lessened competition and did not result in any

benefit to the public, the Government has received a large number of representations expressing concern about the possibility that the present arrangements might disappear.

The Government authorised official discussions with newspaper publishers and newsagents for the purpose of exploring with them whether some variation of the existing arrangements might preserve the exclusive position of newsagents- to sell newspapers and magazines and also be in

the public interest.

These discussions have been held. While principally they involved the parties to the present agreement, some other State publish­ ing and neusagency interests have also been involved. The Agreement which has been submitted to the Commission has resulted from the

discussions uh-ich have been held.

The Commonwealth Government is firmly of the view that the present efficient system of home deliveries and general distribution of newspapers and magazines is of major public benefit and is concerned that this system will disappear unless a system of exclusive territories and clearly defined and publicly recognisable rights and obligations of

newspaper publishers and newsagents is maintained.

The Agreement does not in any way force the parties to adopt an exclusive territory system. Rather it recognises the benefits now provided by that system and enables the parties to continue it in the public interest.

The Agreement recognises and supports the "service to the public" concept of the newspaper industry, e.g. efficient home delivery, easily identifiable neusagencies, the continued circulation of newspapers and ' magazines as widely as possible and at times when they have the most impact. .

The Government supports authorization of this agreement and requests that a central consideration of this authorization be that the "public service" obligations of the Agreement be maintained. .

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The Government also supports the Agreement as it provides for, and in fact ensures, that newsagents are free to conduct their business in a stable environment of assured supplies and guaranteed rights and benefits. . '

· The Agreement enables a newsagent to carry on the newsagency business and any other business as it thinks fit. It permits un­ restricted entry to and sale- of businesses within the industry (subject only to certain commercial limitations). Goodwill v.alue -is not

restricted and owners are freely permitted to conduct other businesses.

The Agreement contemplates termination of a newsagent's business on the grounds of non-fulfilment of "public service" obligations or on proper commercial considerations.

The Agreement provides for a system of independent appeal.

The Government also supports the Agreement as recognising the position in practice of a small business sector in the newsagency system and providing the opportunity for that sector to be as efficient, competitive and independent, as is consistent with newsagent' obligations to the public and with a supplier/retailer relationship, and provides the opportunity for innovation and development within the industry.

(A copy of the Heads of Agreement referred to above, is attached).

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C A N B E R R A , A.C.T.

20 M a r c h 1979

HEADS OF AGREEMENT FOR NEUSAGENCY SYSTEM

Newsagents' Territories

Publishers may agree to appoint a common newsagent for the sale

of their publications within each territory defined by the

Newsagency Administrative Council (NAC).

A portion of a territory may be transferred by a newsagent to

another newsagent or a prospective newsagent:-(i) by agreement between the parties themselves with the approval

of the N A C : or

(ii) at the instance and- by the direction of the NAC after

consultation with the parties concerned. - .

In either case, compensation shall be paid by the acquiring party,

in such amount as may be agreed by the parties or, in default of

agreement, as determined by. the N.A.C. ' " .

Newsagents' Rights and Obligations . ' , '

Subject to the obligations below, the newsagent is free to carry '

on the newsagency business and any other business it may conduct,

as it thinks fit.

Subject to the settlement of detailed . newsagency agreements,

generally the newsagent shall -provide efficient, home delivery at current standards throughout

the territory subject to normal commercial conditions,

ensure adequate selling points within the territory (including

sub-agents and street sellers appointed by the newsagent);

accept the ability of the publishers to fix the maximum weekly

booking/delivery fee (which may be negotiated) .

impose no other fees;

not sell publications outside the territory; ■

pay accounts on usual industry terms;

use its best endeavours to. promote publishers' products, '

including adequate display, in a clearly identifiable news-

agency business. 0

A newsagent may sell the newsagency business to whomever, at what­

ever price and upon whatever conditions, it chooses. The agreement

for sale shall be notified to the NAC and, prior to completion, the

NAC is to be given relevant information concerning the purchaser

and to have the opportunity to disapprove of a purchaser only if''-'

(i) his financial means are insufficient for the acquisition and

running of the newsagency business;

(ii) he has insufficient business and managerial capacity to

conduct the newsagency business;

(i)

(ii)

(iii)

(iv)

(v)

(vi)

(vii)

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. (iii) his business standing is disreputable or irresponsible; or

(iv) the acquisition of the neusagency would result in the

purchaser, controlling an excessive number (say not exceeding

3) of neusagencies.

3. Publishers' Rights and Obligations ^ '

3A Publishers to be obliged to provide newsagents with an adequate .

supply of newspapers and magazines.

3B Publishers to agree to ensure'that newsagents shall provide proper

and efficient service to the public in accordance with 2B .

3C Publishers may agree, with the approval of the NAC, to terminate

the newsagency for failure to comply with its obligations.

4. Newsagency Administrative Council (IMAC) .

There shall be an NAC which shall comprise a representative of

each of Fairfax, News and ACP and a representative of the

. . . Newsagents' Association of N.S.U. and A.C.T. which shall carry

out the obligations and functions given it under this document.

5. Appeals . '

5A Where any publisher, newsagent or the Newsagency Association of

N.S.U. and A.C.T. is dissatisfied with a decision of the NAC, it

shall be entitled to an appeal. Similarly a prospective purchaser

of a newsagency is entitled to appeal any refusal of approval of

sale to it.

SB Appeals shall be decided by an appellate body consisting of· a

person or persons reasonably acceptable to the industry but

• independent of publishers and newsagents, whose decisions shall '

be final and binding. , -

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