Pearson rejects compensation claim from Penguin authors

Pearson's troubled Penguin books division has rejected demands from some of Britain's best-known authors for compensation after sales of their books were hit by a distribution crisis.

Pearson's troubled Penguin books division has rejected demands from some of Britain's best-known authors for compensation after sales of their books were hit by a distribution crisis.

In a meeting at Penguin this week, a delegation led by the distinguished historian Antony Beevor, the author of Stalingrad, was told the publisher was not willing to make a payment to all its authors to cover them for lost sales due to their books being missing from shops.

The computer system at a massive new Penguin warehouse at Rugby failed in the spring last year, leaving distribution of Penguin books in the UK in chaos. It meant many titles were simply not on shelves in bookstores for much of the year.

Mr Beevor's latest book, The Mystery of Olga Chekhova, which came out last May, was hit by the distribution débâcle, as was Saul David, whose editor resorted to sending out copies of his book Zulu by taxi. Jane Shilling, whose The Fox in the Cupboard was published last March, has said: "I started going to bookshops and would see it wasn't there."

Other writers with new books out just before the summer who were affected included Gervase Phinn, the author of Up and Down in the Dales. The writers, represented by the Society of Authors, believe this led to a significant loss of sales. They suggested that Penguin could, for a period, raise the level of royalty payments that authors receive as a possible form of compensation.

In response, Penguin had asked authors to wait until 2004 sales figures were available. It told the Society this week that internal figures were now in, which showed overall sales last year were good. It said that authors as a whole would therefore not be offered recompense but it would consider individual cases from writers who believe they had been particularly affected. Penguin contends that the distribution issue is now under control in the UK.

Mark Le Fanu, the general secretary of the Society, who attended the meeting at Penguin on Tuesday, said that delivery times for books reaching shops were still "not great, but nothing like as bad as last summer".

He acknowledged that Penguin had spent "huge amounts of money to mitigate the problem". He said the authors had yet to decide how to respond to the Penguin rebuff. "They [Penguin] may have done well on heavily promoted books but some new titles and the backlist will have suffered," Mr Le Fanu said.

The problems were at their height around April, May and June. A spokeswoman for Pearson declined to comment on the subject of compensation, saying only: "That is not the right question."

News of Penguin's refusal to pay compensation came as Pearson released a trading update yesterday, which revealed that, even if Penguin in the UK is now trading normally, the publisher's sales in the US are poor. Performance elsewhere in the Pearson group, at its educational publishing business and its Financial Times newspaper, was as previously expected, the company said.

In November, Pearson had said the US presidential election and hurricanes in Florida over the summer had led to a dip in Penguin's sales. At that time, it said book sales should pick up in the run-up to Christmas. Yesterday Pearson warned the recovery had not taken place.

"Penguin suffered as tough trading conditions persisted through the holiday season, particularly in US mass market and backlist titles," Pearson said.

Pearson shares closed down 3 per cent at 620p, as analysts cut profit forecasts.