OFT ruling worries magazine industry

The magazine industry's existing distribution system is under threat after the Office of Fair Trading ruled this week that it is anti-competitive.

The current arrangement, which sees wholesalers including WH Smith and John Menzies negotiate exclusive regional deals with publishers, breaks competition rules, according to the OFT.

However, the industry fears that if the regional deals are scrapped, smaller retailers and low-circulation titles will suffer, as the absence of regional wholesalers will make it more expensive to deliver to rural areas.

The Periodical Publisher's Association fears that the ruling will see the UK suffer a repeat of what happened in the US, where magazine sales fell and many smaller titles were forced to close after regional distributors were penalised.

Ian Locks, the chief executive of the PPA, said: "We don't know it will happen but the fear is that the magazine supply chain will unravel. We have not got everything we wanted and will continue to lobby the OFT."

The OFT enquiry will publish its full report next month before providing a final verdict on 1May.

- ABC report, page 25.