Anger rises with Newspread charges

Tony O Reilly, chairman of Independent Group Newspapers. Following the increase in Independent Newspapers’ wholesale prices, its subsidiary Newspread began invoicing significantly increased charges for deliveries
Tony O Reilly, chairman of Independent Group Newspapers. Following the increase in Independent Newspapers’ wholesale prices, its subsidiary Newspread began invoicing significantly increased charges for deliveries

Retailers react angrily to delivery charge increases from the newspaper and magazine distributor. Newspread says it warned them it was coming

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9 February 2009 | 0

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A major dispute has erupted between Newspread and the CSNA over delivery charge increases introduced by the magazine and newspaper distributor since the start of the year. Following a series of complaints by the CSNA about the conduct of the wholesaler in relation to these increases, Newspread has demanded an apology from the newsagents representative and has threatened to take legal action against it, CSNA chief executive Vincent Jennings told ShelfLife.

According to Jennings, Newspread has surreptitiously added new charges to customers’ invoices and has refused to make known the new rates it is billing for various services. It is claimed that the wholesaler has begun charging customers for ‘full copy collection’ without their knowledge and without their ever having asked for, or availed of, that service. “Retailers are unaware of these extra charges,” said Jennings, adding that they have been “barely mentioned” and there is “nothing on the invoice.”

“To this date they have not made their rates available,” he said, speaking to ShelfLife three weeks after the delivery charge increases were implemented. Jennings accused Newspread of hammering retailers for extra money in order to subsidise delivery costs for Independent Newspapers, of which it is a wholly owned subsidiary.

“The amount of money being taken over and above inflation is outrageous,” he said about the new delivery fees, “and at a time when fuel is at a four year low.” Jennings said that price increases should be linked to some external reference, such as CPI, and he has written to the chairman of the Joint Oireachtas Committee on Economic Regulatory Affairs seeking support for retailers from what he states is an “abuse of a dominant position”.

Newspread’s increases come directly after Independent Newspapers put up the wholesale prices of its products, decreasing the margins. The move has led to a dispute with retailers throughout the country, which resulted in a boycott of the Sunday Independent across hundreds of newsagents nationwide.

Des Murphy of Murphy’s Supervalu, Rosslare, told ShelfLife his delivery charges increased by €20 per week since 1 January, for delivery of the Irish Independent. On contacting Newspread for an explanation, Murphy says he was told that the price increases had been approved by the CSNA and that the charge for full copy collection was “built in” to the overall cost. Murphy claims his store has never requested or received a full copy collection service from Newspread.

In Shannon, Hoctor’s newsagents reported a similar experience with Newspread, receiving a bill for charges which added up to an annualised increase of €1,000. Owner Eoin Hoctor said there had been “no communication” about the increases prior to receiving the bill and that it had been “very difficult” to get anyone to speak to him from within the company. Hoctor said he found Newspread’s treatment of him and his business “unfair”, particularly in light of the current economic environment, and that he would be making “commercial decisions to minimise the effects of this situation on his business.”

In response to the allegations made against it, Newspread told ShelfLife it “sent notification to the trade on 28 December regarding the review of service charges.” It said the CSNA and “others within the industry” agreed its graded delivery charge system is fairer than the flat rate, and that it recalculates delivery charges according to this system every 13 weeks.

Newspread also says its customer service call centre “operates industry-leading service levels” and answers “95% of all calls received, with an average answer time of just 15 seconds.” Finally, the distributor said its full copy collection has been “lauded by many as one of the greatest success stories of the industry for many years.” It states: “The savings to the trade have been enormous both in terms of time processing returns and also in removing local waste collection charges.”

 

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