Retailers are calling for a single distributor for newspapers and magazines in Ireland, following the decision of EM News to increase its carriage service charge (CSC) from April. EM News and Newspread separately distribute publications across Ireland, which amounts to two separate charges for newsagents. The UK, on the other hand, has a single supplier for the majority of its territories.
In a letter, dated February 21 and signed by Joe Doyle, Regional Manager for EM News in Ireland, the distributor outlined how the new maximum CSC is set at €67.27.
According to calculations by the Convenience Stores & Newsagents Association (CSNA), this amounts to a 1.9% increase on the current charges: ranging from a €0.84 cent increase in Band 1, to a €1.25 increase for retailers in Band 9.
EM News, owned by Menzies Distribution, cited surging costs “directly associated with the delivery and collection of newspapers and magazines”, and disruption caused by the pandemic and Brexit, among its reasons for the price hike. A “widely publicised and unprecedented driver shortage”, which led to problems “recruiting and retaining employees”, was another factor. EM News reviews its CSC on an annual basis and did not increase the price in 2021.
EM News claimed it was “continuously improving and investing" in its network and was making an environmental commitment to net-zero emissions.
Retail News spoke to a number of retailers who were incensed by the new rate. Tom McDermott, owner of a Londis store in Clonmel, said the price of stocking newspapers is constantly going up while sales are diminishing. “[EM News] want us to pay them to sell the newspapers. It’s a diminishing trade. The margin has totally gone – it’s gobbled up by charges. We have no way in clawing it back,” he said.
Vincent Jennings, CEO of the CSNA, described the banded model behind CSC, whereby retailers are charged according to the size of their stock, as disproportionate due to the starting fee of €44.85. Under this minimum charge for a seven-day delivery, a retailer on a higher band pays a lower price per copy than someone buying the minimal amount of newspapers, according to the CSNA. In some instances, this could result in a net loss as any ‘profit’ on sales could be wiped out by the €44.85 fee.
“It’s the same product – and you’re doing the same social service of spreading democracy – but one band will give you a much better return than the other,” Jennings concluded.
Most retailers believe the duopoly method of distribution in Ireland requires reform.
“I have to pay a carriage service charge twice with Newspread and EM News,” said Valerie Boggan, who runs Boggan’s Londis on Rosslare Strand. “Why do I have to pay two charges when only one van comes to my door? I am raging about it.”
“Irish publishers need to understand that the companies they engage to distribute their titles are choking the route to market,” added Jennings. “There has to be a situation where all newspapers and magazines are distributed by one company only.”“Irish publishers need to understand that the companies they engage to distribute their titles are choking the route to market,” added Jennings. “There has to be a situation where all newspapers and magazines are distributed by one company only.”
Martin Mulligan, President of the National Federation of Independent Retailers (NFRN), ROI district, called for CSC increases to be transferred to the cover price on publications.
Retailers have seen a dramatic increase in costs over recent months: from energy bills to insurance, to the minimum wage increase in January. In an open letter to Eamon Ryan TD, Minister for Environment, Climate and Communications, Martin Mulligan accused the Government of leaving independent retailers “high and dry” in the wake of cost increases.
“In December, I got my monthly electricity bill and it was more than double my average of €3,000,” he wrote.
Siobhan Armstrong, who works with the NFRN president at Mulligan’s Londis in Athlone, said their utility bill has doubled. Mulligan added: “The new forecourt license is going to be expensive as well. The cost of doing business is very challenging at the moment.”
Retailers are being hit by a myriad of global conditions. Food prices went up over the last two years on account of pandemic-related shipping disruptions. Now the Russian invasion of Ukraine has sent supply markets into turmoil. War in Eastern Europe is having a knockon impact on food, security and energy prices, Taoiseach Micheál Martin warned.
Mulligan’s Londis, and other forecourts around Ireland, have seen substantial increases in prices at the pump. “I’ve been here nearly 20 years and I’ve never seen it jump as much,” said Siobhan Armstrong.
“Groceries have sky rocketed too,” said Valerie Boggan. “We get a price bulletin every Wednesday and Thursday. Sugar, bread, beans – it’s all increasing. I can’t remember the last time I put up the price of a bag of sugar – it’s the first time I’ve done so in 20 years.”
Mulligan called for the introduction of an ombudsperson in Government to oversee the cost of doing business for independent traders. Jennings called on newspaper and magazine distributors to organise a “consistency in approach” and reform “outdated” carriage service charges. “We don’t sell any other fast moving consumer goods that have a specific delivery charge,” Jennings said. “If we buy Coca-Cola, Lottery products or dairy, the wholesale price incorporates the cost of delivery. Why are newspapers so radically different?”
Valerie Boggan told Retail News that she recently visited a local shop in Waterford to purchase a newspaper. The shop advertised itself as a newsagent, but the proprietor told Boggan they no longer sold newspapers.
The latest CSC increase could push more independent retailers into dropping their news category, in favour of products that offer enhanced margins and demand less time, suggested the NFRN.
This, retailers believe, would be a tragedy. Newspapers are a cornerstone of democracy. The role of national and local press in Ireland should be to afflict the comfortable and comfort the afflicted. But without reform to the island’s distribution system, the purported decline of print media may happen much faster than expected.
