Tuesday, January 27, 2009

News Group won't surcharge on single copies, at least for now

One of Canada's two largest magazine wholesalers, the News Group, is not following the lead of two of its largest U.S. counterparts in adding on a surcharge to single copy sales -- at least for now. This, according to an item in the usually reliable column by Keith Kelly in the New York Post.

Last week, Anderson News and Source Interlink -- together representing half of the magazine distribution in the U.S. -- announced that they would be adding 7 cents to every copy, starting February 1. In addition, Anderson said it intended to shift responsiblity for the cost of scan-based trading to publishers.

While News Group President Glen Clark agreed that all wholesalers need help, he pledged his company won't impose a price hike similar to ones proposed by Anderson News and Source Interlink Cos.

"The wholesalers need help, there is a serious issue," said Clark, as he touched down in Vancouver after huddling with publishing executives and magazine distributors in New York yesterday.

"Charlie Anderson [CEO of Anderson News] is basically right, but we feel we'd like a negotiated solution," said Clark, who noted that while he won't impose a hike on Feb. 1, he can't rule it out down the road.

Magazine publishers are, naturally not happy about the surcharge.

"This is a giant Ponzi scheme," complained one publishing source, who said the only way the surviving wholesalers have stayed in business is by "stealing each other's customers to increase their cash flow."
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