It has expressed particular concern over consultants' recommendations adopted by the Health and Safety Executive in contracting out distribution of its publications. Pentos subsidiary Dillons won the contract for retailing, and Prolog the separate contract for mail order. Previous contracts, undertaken by HMSO, were for distribution to all retailers on equal terms.
Now booksellers other than Dillons must buy from Prolog at the recommended retail price, leaving them only able to match Dillons' prices if they forgo a margin. It is believed to be the only instance of a large publisher entering into an exclusive deal with a retailer.
A spokesman for the HSE played down the problems, saying: 'I don't think there is a row. It is all going very well.'
Willie Anderson is managing director of John Smith Booksellers of Scotland, which for many years has been one of the largest agents for HMSO books including, until last year, HSE publications. At its peak, the company's annual turnover of HSE books was pounds 100,000. 'The HSE doesn't fully appreciate and understand the difficulties that businesses and our customers are facing,' Mr Anderson said. 'As booksellers, we would like to help the HSE, and as publishers they should allow all outlets to provide books to their customers. 'There are no Pentos outlets in Edinburgh. We don't want to blame Pentos; the fault is with the HSE.'
The problems arose he said, because the HSE misunderstood the book-retailing sector. 'They say they've done a full market survey. But as far as we know they've not spoken to any booksellers. It is another example of market forces being introduced by a government department which hasn't the faintest idea what the market is.'
Mr Anderson also argues that it is improper for a government department to favour a single commercial retailer. 'I think that is restrictive trading, if the Office of Fair Trading would like to look at it.'
The OFT confirmed that a complaint had been lodged regarding the agreement, but would not comment further. A spokeswoman said the HSE's decision was 'based on commercial rather than anti-competitive grounds' and 'is unlikely to have a significant effect on the market'.
A spokesman for Pentos said the company is 'very happy' with winning the contract, and the operation of it. He added: 'I can't comment on other people's reactions. We were invited to participate and were delighted with the outcome.'
Michael Meacher, the Labour Party's spokesman on open government, said: 'It sounds like another example of taxpayers' money being used to provide advice to back up what ministers are determined to do. There has been too much market testing for the sake of it, without looking at the outcomes.'Reuse content