Tesco ready to climb down in magazine row

Tesco, the UK's top-ranked supermarket group, is set to drop its controversial agreement to make WH Smith its sole supplier of magazines if publishers can come up with an acceptable alternative by the end of next month.

Tesco, the UK's top-ranked supermarket group, is set to drop its controversial agreement to make WH Smith its sole supplier of magazines if publishers can come up with an acceptable alternative by the end of next month.

The sudden climbdown followed a meeting on Tuesday, led by Terry Leahy, Tesco's chief executive, and Roger Eastoe, chairman of the Newspaper Publishers Association.

The two groups, which had been at loggerheads over Tesco's decision to switch from its existing regional distribution network to the new system with WH Smith, agreed to consider proposals for an alternative framework to meet the requirements of both retailers and suppliers. The aim is to reach a mutual understanding by the end of September. But Tesco has agreed to consider extending the deadline if necessary. A spokesman for Tesco said: "Until now, it has been difficult to get into a constructive dialogue [with publishers] for all sorts of reasons, which revolve around a basic resistance to change."

The NPA had accused Tesco of putting thousands of small retailers at risk by enforcing a national wholesaler network with 50 per cent of all magazine distribution being handled by WH Smith. Bill Hamilton, an NPA spokesman, warned that the long-running dispute was "not necessarily over. This is not a peace document. It is a step forward", he said.