Collapse of Net Book Agreement `within months' collapse'
Monday 26 December 1994
The agreement, dating from 1899, is a price-fixing deal between publishers and booksellers to protect the wide range published and stocked in shops. It prevents booksellers offering discounts on "net" price books.
The withdrawal of Hodder Headline, following the 1992
decision by Reed Books to denet, is expected by insiders to herald the end. If one more major publisher withdraws - both Random House and Harper-Collins are wavering - it may not survive beyond the summer.
From today the public will be able to test such a prospect with discounts of 20 to 50 per cent in participating bookshops, such as Dillons, on Hodder Headline books including authors like John Le Carre.
According to the company's chief executive, Tim Hely Hutchinson, the agreement is history. "The NBA is crumbling around the booksellers and publishers. If people feel they are just performing a King Canute act they will give up"
The force behind attempts to keep it is the Publishers' Association, which last month launched an appeal to raise £1m for a legal defence. Battle begins in earnest in the spring when the Restrictive Practices Court will re-examine whether it is in the public interest.
The scheduled preliminary hearing comes after the August decision by the Office of Fair Trading to reconsider the issue. Its director general, Sir Bryan Carsberg, will have to satisfy the court that the publishing and bookselling trade has substantially changed since 1962, when it was last reviewed by the Restrictive Practices Court.
Mr Hely Hutchinson is confident it has. "There is much greater domination by chain booksellers and publishing conglomerates. That means the NBA is now existing to prop up the margins of a few strong companies ."
Arguments for keeping the agreement are that supermarkets would otherwise sell large quantities of a narrow range of bestsellers (cheaper without the NBA), cutting bookshop profits and forcing them to reduce their range. Fewer titles would be published, small booksellers would be unable to compete in the discounting wars and go under, print runs would shorten and the price of less popular books would rise to compensate for lower profits on bestsellers.
The opposing camp claims the NBA widens the range of books published, of which much is rubbish. Without it, publishers would be more discriminating, customers would be offered cheaper books and would, therefore, buy more, and literary interest would be stimulated.
Bill McGrath, chief executive of Pentos, owner of the Dillons chain, is among them. He says in the US, which has no pricing restrictions, expenditure a head on books is three times higher.
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