The backlash against WH Smith's proposed national newspaper distribution system has escalated, with John Menzies issuing a writ against the wholesale newspaper arm alleging abuse of market share and bullying tactics.
This latest move follows Associated Newspaper's announcement last Friday that it was ending a pounds 100 million distribution agreement with WH Smith from the end of May 2001.
The high-street retailer issued a statement on Monday saying that the move was 'without justification and in potential breach of contract'.
Associated, which publishes the Daily Mail and the London Evening Standard, decided to terminate its agreement with WH Smith because it was 'horrified' by the high-street retailer's announcement earlier this year that it was to form an exclusive contract with Tesco to supply magazines to the group nationally. This would cut out wholesalers and form greater cost efficiencies.
The move sparked concern among Associated and other newspaper publishers that this would have a knock-on effect on newspaper distribution.
The Periodical Publishers' Association is in talks with Tesco, which has put its planned deal with WH Smith on hold, but WH Smith is refusing to compromise on its plans. It states: 'WH Smith has taken no steps to change the arrangements for the distribution of newspapers and has no desire to do so.'