The Guardian has published the text of an e-mail that the Asda chain (which was taken over by Wal-Mart in 1999 and is now the second-largest grocery chain in Britain) sent to all its magazine suppliers. An accompanying story said the grabby retailer has made publishers furious:
In addition to the free advertising/editorial space, Asda is asking for:
Publishers supplying magazines to Asda branded the supermarket's demands "outrageous" and not "economically viable".
However, an Asda spokesman said the email sent to magazine publishers was a starting point for discussion and that the company expected to reach an agreement that suits both sides.
- a "space contribution" of £10,000 paid to the supermarket chain;
- a space contribution for each new Asda store opened of £2,500 per magazine title;
- any new title to pay an "item set up" charge of £2,464;
- a turnover bonus to the value of 2% of its magazine suppliers' total business to be paid quarterly and backdated to January 1 2008;
- a "hurdle rate" for new titles carried in stores, so if sales of the magazines are 20% less than forecast the supermarket will be compensated with the difference.
[UPDATE]Asda has said the demand for editorial space in the magazines it carries was a mistake. According to a report in Campaign magazine:
A spokesman for Asda told MediaGuardian.co.uk: "The email sets out a number of proposals aimed as a starting point to begin discussions.
"As with any negotiation, both parties have a wish list which will quickly change as middle ground is sought and an agreement that suits both parties is found."
"Representatives of Asda, magazine distributors and publishers met on Tuesday to discuss the proposals. In the meeting, Asda is understood to have blamed the e-mail on a junior buyer who was naïve and new to the category. Publishers are awaiting new proposals from the supermarket. A spokesman for Asda declined to comment on the seniority of the person who sent the e-mail.