The Federation of Independent Retailers (the Fed) says independent retailers served by Menzies Distribution have reacted with dismay after learning that the news wholesaler is increasing its carriage charges by an average of 3 per cent from April without considering other ways for the supply chain to operate that do not pile yet more costs on hard-pressed retailers who can ill afford them.
To make matters worse, added the Fed, the rise takes effect from April 6, just days after the mandatory national living wage for employers aged 21 and over increases by nearly 10 per cent and without any consultation with Menzies’ retail partners.
For many years, the Federation of Independent Retailers says it has called for carriage charges to be scrapped, branding them unfair and illogical, and for publishers, wholesalers and retailers to find an alternative solution.
Responding to Menzies announcement, the Fed’s National President Muntazir Dipoti said on Monday: “This morning, retailers served by Menzies Distribution have received a letter from its managing director Grant Jordan which begins by saying that ‘Menzies is committed to providing a quality, reliable and sustainable service for our newstrade partners’.
“Sadly, our members would say that there is no clear evidence of a “a quality and reliable” service and continual increases to carriage charges year in and year out are not sustainable for independent news retailers.
“The letter cites significant economic pressures, including rising labour costs, which Mr Jordan says Menzies is unable to absorb, yet that it something that it expects its retail partners to do, as we cannot pass increases in carriage charges to our customers.
“To add to our dismay, the increase was decided without any prior consultation and although the Fed’s head office was advised of the move late on Friday afternoon, no exact detail was forthcoming. As a result, we have been unable to discuss our concerns about the impact that yearly carriage charge rises have on our members’ profitability. I will be seeking a meeting with Mr Jordan and senior Menzies executives at the earliest opportunity.”
The letter from Grant Jordan finished by saying: “We remain committed to working alongside our partners to support the long-term sustainability of the newspaper and magazine category, with service excellence and customer satisfaction always remaining our priority.”
Confirming the 3 per cent increase to the Fed’s head office on Monday this week, Menzies Distribution advised that this was being capped at £4.99 per week for customers in the highest bands in its carriage charge template. It added that the average increase in charges for customers in Ireland would equate to 1.7 per cent and that charges were being frozen for customers in the two lowest bands.
Commenting on this, Mr Dipoti said: “While it is good news that some customers will see the increase capped at just under £5 a week and that some retailers in the Republic of Ireland have seen their charges frozen, there appears to have been little other consideration for smaller news stores who continue to support the news category despite concerns about its profitability.”Keep up-to-date with publishing news: sign up here for InPubWeekly, our free weekly e-newsletter.