Saturday, December 03, 2005


Dumping on Literature

After all the fuss in British media last week about the Office of Fair Trading's upcoming decision over the Waterstone's and Ottakar's merger... silence. What's going on? Turns out the decision, due on Friday, has been put off for a week -- something that Forbes was one of the few outlets to even report on.

In the meantime, though, today's Daily Telegraph reports that a ruinous price-cutting war is being waged by the chains:

Virtually every Christmas hardback is now available at 50 per cent off, from the cricketer Freddie Flintoff's autobiography to Jamie Oliver's Italian cookbook. W H Smith also has additional "10 per cent off everything" days. Waterstone's set a new benchmark this week, selling Gloria Hunniford's Next to You about her daughter Caron Keating for only £6.99, a discount of £11 on the cover price.

Nigel Jones, of the market town chain Ottakar's, said: "I am staggered at the extent of the discounting. It is more than just price-slashing, it is carnage."...

The latest books war has broken out a decade after the collapse of the Net Book Agreement, which barred discounting to protect publishing diversity.... Smaller chains and independents are feeling the pressure. Many blame publishers for offering trading discounts of as much as 75 per cent to the large retailers. When Harry Potter and the Half-Blood Prince was discounted by up to 70 per cent in July, the MP Lynne Jones tabled an early day motion urging publishers not to deal on terms that enabled "extreme discounts". But publishers say that they risk being forced out of shops if they fail to agree deals.

To be fair, it should be pointed out that chains have long had a large presence in Britain: indies already had their clocks cleaned out by WH Smith back in the Victorian era. Even so, for almost the entire 20th century -- hard to believe, but true -- book discounts were regulated. Not so since the death of the Net Book Agreement. And with new books being sold at 75% off -- below wholesale -- well, I guess you could call that a loss-leader. But in other contexts there's another word for systematically selling at a loss to drive out your competitors: it's called dumping.

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