Dáil Éireann debate -
Thursday, 6 Mar 1997

Vol. 476 No. 1

Written Answers. - Reduction in Magazine Prices.

Mary O'Rourke

Question:

93 Mrs. O'Rourke asked the Minister for Enterprise and Employment the reason progress has been so slow in relation to reducing the price of magazines, books and recorded music which are imported from Britain; and if he will make a statement on the matter. [6196/97]

Minister for Enterprise and Employment (Mr. R. Bruton)

In reply to a number of similar questions previously, the most recent of which was on 22 October 1996, volume 470, No. 4, columns 700-704, I reiterated that the only investigation commissioned by me for the products concerned relates to the investigation of the retail prices of magazines imported from the United Kingdom.

On that occasion I recounted:

the investigation undertaken by the Director of Consumer Affairs, earlier in 1996 into the prices of magazines imported from the United Kingdom because of the widespread perception that the benefit of the appreciation of the Irish pound vis-á-vis sterling was not being reflected in lower cover prices; the principal findings of the investigation, which were that:

(i) the industry was dominated by two importers-distributors, who continue to work on the variation of a formula, first agreed by the National Prices Commission (NPC) in 1983,

(ii) in contrast to the inclusion of an "uplift" of 5 per cent by the National Prices Commission, to compensate for the additional costs associated with the distribution of these magazines in Ireland, the distributors had in the meantime increased the uplift to 10 per cent and

(iii) the complex formula operated by the distributors resulted in the retailers charging the same price, indicating the total absence of price competition,

—the circumstances culminating in my making a Maximum Prices Order for imported magazines on 9 July 1996.

—the subsequent revocation of the Order, following a High Court challenge by the principal distributor and one of the retail news-agents' association, and having regard to the legal advice available to me.

I referred also to the investigation, then in progress by the consultancy unit in my Department into the cost structure, both wholesale and retail, and operating margins for Irish as well as imported magazines. This investigation which is both comprehensive and painstaking also addresses the impact on costs and prices of the practice by the distributors of imposing delivery charges, the distribution arrangements for such magazines and the extent to which they interlock with those for newspapers.

The investigation by the consultancy unit is now nearing completion, and I expect to receive their report on 12 March 1997. I should also add that, because of the concern expressed by the Director of Consumer Affairs about a number of the common practices pursued by the distributors, I have asked the Director of Competition Enforcement to investigate the prices and distribution arrangements for magazines.

Finally may I say that, in response to a number of representations made to me in recent weeks about the differential between Irish and UK prices for compact discs, I have asked the Director of Consumer Affairs to investigate the matter.