Any intervention by the OFT to refer the newspaper and magazine distribution market to the Competition Commission for investigation will come too late to save Dawson News, the company has admitted.
The stricken newstrade wholesaler has been calling, alongside newsagents' associations and retailers, for a referral after losing eight contracts worth £463m in the space of a year to rivals Menzies Distribution and Smiths News, including a £65m contract with Trinity Mirror last week.
This week the OFT said it was "closely monitoring recent market developments", but would not make a final decision on whether to refer the market to the Competition Commission until the autumn. But a spokesman for Dawson News said autumn would be too late. "If the OFT decides in autumn there is a need for more competition in the industry, what are they going to do with that decision? There is no way a start-up company could break into that market and Dawson News will likely not exist. Any decision will be made months after it can have any meaningful effect."
Last week Dawson Holdings, the parent of Dawson News, unveiled a massive shake-up of its operations to protect the remaining parts of its business - including plans to exit newstrade. "In the absence of regulatory intervention, the group will have no viable alternative other than to seek to effect an orderly exit from this market," said outgoing CEO Peter Harris.
Newsagents continue to rally around Dawson News by calling for a referral. As The Grocer went to press, nearly 600 had signed a petition urging the OFT to investigate immediately.
Writing on the petition, one newsagent said: "I have had this newsagents for 27 years now and in all that time I have never been so afraid of the future viability of my store. As if the relentless unfair competition from the supermarkets were not bad enough, now we are threatened by absolute monopolies created by the news wholesalers."
The stricken newstrade wholesaler has been calling, alongside newsagents' associations and retailers, for a referral after losing eight contracts worth £463m in the space of a year to rivals Menzies Distribution and Smiths News, including a £65m contract with Trinity Mirror last week.
This week the OFT said it was "closely monitoring recent market developments", but would not make a final decision on whether to refer the market to the Competition Commission until the autumn. But a spokesman for Dawson News said autumn would be too late. "If the OFT decides in autumn there is a need for more competition in the industry, what are they going to do with that decision? There is no way a start-up company could break into that market and Dawson News will likely not exist. Any decision will be made months after it can have any meaningful effect."
Last week Dawson Holdings, the parent of Dawson News, unveiled a massive shake-up of its operations to protect the remaining parts of its business - including plans to exit newstrade. "In the absence of regulatory intervention, the group will have no viable alternative other than to seek to effect an orderly exit from this market," said outgoing CEO Peter Harris.
Newsagents continue to rally around Dawson News by calling for a referral. As The Grocer went to press, nearly 600 had signed a petition urging the OFT to investigate immediately.
Writing on the petition, one newsagent said: "I have had this newsagents for 27 years now and in all that time I have never been so afraid of the future viability of my store. As if the relentless unfair competition from the supermarkets were not bad enough, now we are threatened by absolute monopolies created by the news wholesalers."
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