Published by: Joe Lenane | Published Date: 28th September 2012
Anger as Menzies Distribution are set to apply a £8.50 weekly charge as a flat rate levy (regardless of value or volume) for sending out two extra titles.
Delight at the news that News International was to cease its direct to retail operation everywhere except London will turn to anger today when retailers discover that Menzies Distribution will be applying a £8.50 weekly charge as a flat rate levy (regardless of value or volume) for sending out the two extra titles. This is in addition to their existing value based templates that have a minimum and maximum charge for other titles that the company supplies.
NFRN National President, Alan Smith, said: “This news comes as an absolute shock to the NFRN and it will anger our members, many of whom are already paying the maximum carriage charge to their wholesaler and had every right to expect that the carriage charge they were paying to News International had gone for good.
“Not only is Menzies prima facie in breach of its own terms and conditions of supply, for failing to give appropriate notice before making a significant change to its contract with retailers, but, by moving the goal posts on how carriage charges are applied, Menzies has re-written the rule book. Are you watching OFT?
“Yet again such action by Menzies reinforces our long term belief that the two remaining wholesalers are being allowed to bid for and win contacts well below cost, with independent retailers having to pay the price.”
Mr Smith continued: “To make matters worse, Menzies claims to have saved millions of pounds by introducing more hub and spoke operations. If that’s the case why are they not picking up the cost of handling these extra titles, rather than putting yet more financial burden on hard pressed retailers? At worst, Menzies should be merely adding the value of NI titles that it supplies to retailers existing weekly accounts and re-calculating the carriage charge appropriately. Adding a new flat-rate charge for NI titles makes a mockery of what is already a wholly discredited and unjustified monopoly rent that is imposed on retailers.
“What we are seeing here is a new two tier carriage charge system being applied without any prior notice, which is totally unacceptable. We’re not talking about small changes to Menzies’ existing terms and conditions of supply; we are talking about a completely new contract. The NFRN is therefore taking legal advice – not just from our contract lawyers but from our competition lawyers too - to advise on the prospect of formal legal action against this latest scandalous rip off.”