Newsagents were left reeling this week after a near three-year investigation by the Office of Fair Trading concluded the newspaper and magazine distribution sector did not need to be referred to the Competition Commission.
Despite failing to give the sector a clean bill of health, the OFT said it would not be making a referral because "future market changes" could benefit consumers. It has instead given the industry the chance to self-regulate before reviewing it again in two years time.
The OFT had identified areas of newstrade that could prevent, restrict or distort competition, such as copy allocation, cover prices and granting wholesalers exclusive distribution territories, said director Louis Christofides, but a referral would "not be appropriate at this time".
A number of instances of best practice were already being carried out, which, if adopted more widely, could help the sector work more effectively in the future, Christofides added.
The National Federation of Retail Newsagents, which made the request for a referral in December 2006, claimed the OFT had ignored "overwhelming evidence that any reasonable person would expect to justify a referral".
"Given the indisputable evidence of how the news industry supply chain is failing to support the independent sector, including blatant exploitation, and the creation of minimum financial targets for new entrants, how many independent retailers the OFT expects there to be left to save in two years time is not explained," said NFRN trade relations manager David Daniel.
The Association of News Retailing's MD John Lennon added: "The issues raised are not going to go away and the OFT will have to revisit the issue."
Smiths and Menzies welcomed the decision. "The announcement brings closure at present to what has been a lengthy process and allows us to devote our full energies to delivering improved customer service standards," said a Menzies Distribution spokesman.
Despite failing to give the sector a clean bill of health, the OFT said it would not be making a referral because "future market changes" could benefit consumers. It has instead given the industry the chance to self-regulate before reviewing it again in two years time.
The OFT had identified areas of newstrade that could prevent, restrict or distort competition, such as copy allocation, cover prices and granting wholesalers exclusive distribution territories, said director Louis Christofides, but a referral would "not be appropriate at this time".
A number of instances of best practice were already being carried out, which, if adopted more widely, could help the sector work more effectively in the future, Christofides added.
The National Federation of Retail Newsagents, which made the request for a referral in December 2006, claimed the OFT had ignored "overwhelming evidence that any reasonable person would expect to justify a referral".
"Given the indisputable evidence of how the news industry supply chain is failing to support the independent sector, including blatant exploitation, and the creation of minimum financial targets for new entrants, how many independent retailers the OFT expects there to be left to save in two years time is not explained," said NFRN trade relations manager David Daniel.
The Association of News Retailing's MD John Lennon added: "The issues raised are not going to go away and the OFT will have to revisit the issue."
Smiths and Menzies welcomed the decision. "The announcement brings closure at present to what has been a lengthy process and allows us to devote our full energies to delivering improved customer service standards," said a Menzies Distribution spokesman.
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