CARRIAGE CHARGES MAKE THE DIFFERENCE TO BOTTOM LINE FOR EM
Every week, retail customers of EM News pay a Carriage Service Charge for the delivery/collection of printed news. They also pay a similar charge to Newspread.
EM News has in excess of 3,000 retail outlets receiving daily supplies in the Republic of Ireland. They each pay a minimum of €2,000 p.a. This is a minimum “income” from retailers of €6,000,000. In reality the figure is greater than €7m given the average retailer will pay a weekly charge of €45. We must remind retailers that EM (and Newspread) also receive a fee/income from publishers based upon the RSP of the titles.
The recent announcement by EM News accompanying their annual financial report (their profit was €988,000 last year) shows the frightening extent that distributors reply upon carriage charges to keep their heads above water. This is not sustainable, retailers cannot be expected to continue to prop up a system in a fashion that reduces the profitability to us of the category.
€EURO RECOMMENDED RSP COVER PRICES CAUSE CONFUSION AND COSTS MONEY
Retailers will be familiar that a number of UK-based publishers place a €RSP on the cover of their title alongside the £STG RSP.
Ordinarily, this € price is advised to the wholesaler and therefore the EM Delivery Note will list the €RSP as the price upon which the wholesale price is based.
Difficulties for retailers can arise when the publisher prints a €RSP upon the title without having advised the wholesaler (in this instance, EM News), or when such advice is given but not actioned. In such instances, the £STG RSP issued to “reckon” the Euro €RSP using the EM Ready Reckoner with a delivery note RSP that is significantly higher than the € price on the cover of the title.
The most recent issue of Cycling World had cover price of STG £4.75 and Euro €4.99.
EM News delivered these titles with a Euro €7.75. This RSP would be the correct €RSP for a STG £4.75 product retailing with 9% VAT based on the latest (Oct 2015) EM Ready Reckoner.
Any retailer selling the title at the recommended selling price printed on the cover as Euro €4.99 would actually lose 75 cent on each title.
RSP €7.75 ex VAT = €7.11 less 25% discount = €5.33
Selling €4.99 ex VAT = €4.58
Retailers or their staff that see a €RSP printed on the cover of the magazine can be forgiven in believing that this (coverprice) RSP is the correct retail price upon which the product would be sold and provide the store with a profit – they certainly don’t expect the product to cost them money.
We have asked EM for a full report on this practice.
NEWSPREAD AND IRISH TIMES
Members should be aware that from next Monday, their supplies of Irish Times will be coming from Newspread.
All unsold returns for these supplies should be therefore returned to Newspread. You can bundle these copies alongside with any other unsold newspapers supplied by Newspread (Independent, Mirror, Racing Post, Irish Daily Star etc.)
Members should also be aware that the Irish Times have directed Newspread to charge a weekly fee of €2.60 for what they term as an “unsold collection charge”. We are sure that you are annoyed about this direction. The Irish Times no longer have a transport division, will no longer have a Datascan contract for scanning their returns and no longer have a need to deal with their retail customers.
This €2.60 windfall equated to €135 per year per retailer or over €3 million during the course of the new distribution contract. That is your money on top of Newspread carriage charges which have an element of them to cover collection and returns processing.
The Association has held meetings with both the Irish Times and Newspread on these matters. Apart from the Irish Times agreeing to return deposits to all their Irish Times customer, we were not able to get them to set aside their unprecedented publishers instruction to place such a charge onto retailers Newspread accounts.
This matter is not considered closed by CSNA; we will take further steps to force a reversal of this blatant attack on retailers by The Irish Times.
Back to news