T He Daily Mail Has Sacked Its Wholesaler WH Smith News from Its [Pound]100m a Year Business in Protest against Smith's Decision to Seek Exclusive National Distribution Agreements with Supermarkets and Other Retailers

Sunday Business (London, England), November 26, 2000 | Go to article overview

T He Daily Mail Has Sacked Its Wholesaler WH Smith News from Its [Pound]100m a Year Business in Protest against Smith's Decision to Seek Exclusive National Distribution Agreements with Supermarkets and Other Retailers


T

he Daily Mail has sacked its wholesaler WH Smith News from its [pound]100m a year business in protest against Smith's decision to seek exclusive national distribution agreements with supermarkets and other retailers.

The newspaper's publisher, Associated Newspapers, has written to Lloyd Wigglesworth, WH Smith's managing director, to tell him it is terminating the supply of the Daily Mail and Mail on Sunday titles to the wholesaler.

It fears WH Smith's plans will put independent wholesalers and local newsagents out of business, thereby affecting newspaper distribution.

Associated's decision is likely to cost WH Smith more than [pound]7m in lost profits. Profits at Smith's wholesaling business dropped 3% to [pound]38m for the year to August.

WH Smith News' national distribution arrangement was set to be implemented last month with Tesco. However, Tesco has postponed signing up to the deal. Safeway has given a commitment that it will become part of the scheme next year, says WH Smith, while Smith's retail arm is already operating the system.

Associated's move comes as WH Smith is understood to be considering floating its distribution arm as a separate business.

Associated is WH Smith News' single biggest newspaper customer and it distributes 900,000 copies of its titles a day, more than 40% of the total.

The publisher will now withdraw two-thirds of those after giving WH Smith six months' notice. It is keeping some of its business with WH Smith because it cannot immediately find other wholesalers to replace it in all parts of the country.

Although WH Smith's national distribution scheme does not involve newspapers, Associated, along with other publishing groups such as the Periodical Publishers' Association, regards the scheme as a "blueprint" for newspaper distribution in the long-run. …

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